5 Keys to Choosing A Bank – My Financial Wellness Guide Part XI
Choosing a bank to partner with is critical for your financial wellbeing. It is a business, not your best friend, Businesses are in constant flux and sometimes you’ll be caught off guard when your bank is bought out or staff changes overnight. Evaluate the level of service you receive on a regular basis and always ask questions, remember they work for you.
First and foremost, you need to have at least one Checking Account that is in your name. It can be at the same bank as any joint accounts you may have. Get to know the experience first hand – whether it’s online or in person. If you have anyone else on your account, other than as a named beneficiary, they have the same rights as you do to withdraw funds and close the account. It happens. A lot.
If you are single, be sure you have a back up plan in case you are hospitalized and especially if you are out of the country. Rules are strict around allowing non-owners to have account access. Even if it’s your Mother. Make sure there is someone that can keep your bills paid until you are back. A Power of Attorney can be helpful for short term needs or longer term, so your representative can step in your place and keep things going.
Second, compare product offerings and find a Checking Account that works best for the way you manage your cashflow. Every bank will have their choice of accounts and will offer to add on services with fees. Do your homework to really understand each service. Over the past ten years banks have become very creative with features that really don’t matter. Don’t be wooed.
Third, know their procedures in how they handle deposits and withdrawals. Depending on their level of technological sophistication, or lack of, they may hold check deposits until the funds are actually collected through the channels. Be prepared to wait several days, even if the check is from the same financial institution. If a check is returned, those funds will be withheld from your account immediately. Good rule of thumb is not to spend the funds until you know they have cleared the bank.
Not all banks process withdrawals in the same way. In our minds, we think about transactions in chronological order – what you spent first, second and so on. In the banking world, cash usually takes precedence. If you used a debit card for three purchases and walked to an ATM to withdraw cash, even if it’s 7 pm, the cash transaction will be counted first at the close of the day. There’s is no float time.
Fourth, know where the decision makers are located. If you have a one time mistake or someone hijacks your account, know who has the authority to make sure you are treated fairly and resolved quickly. At smaller banks, it can be rather subjective and can vary from one branch to another. Unfortunately with staffing changes, what one person offered, may not be what the next person is willing to do.
Fifth and finally, consider having accounts are two different banks. Use one for their better digital options and another for their personal local attention. If you ever need to quickly close an account, it’s easier if you already have a second one set up. If you plan for the worse case, it’s easier to manage when things happen – because they will.
At the end of the day, the purpose of using banks is to manage cashflow and easily transfer funds in and out of your account, with security and accountability. If the one you have isn’t removing barriers and making it easy for you, then shop around.
What kinds of things do you do to choose a bank?