Getting maximum value from all your financial products has never been more important and a key component of this is ensuring that you have selected a bank that is a good fit with your needs. However, it’s still the case that many individuals put very little thought into the bank that they choose to have their accounts with. Indeed, all too often people are with a bank because their parents banked with that company, or because it just happens to have the nearest located branch.
Of course, convenience is an important aspect to consider when selecting a bank, so the location of its branches may be pertinent. However, these days convenience goes much wider than this and includes whether the bank offers a good Online Banking service and whether it offers a Mobile Phone Banking service. Consumers, quite naturally, tend to value having lots of choice in how they do their banking so a branch only proposition or an Internet only proposition may not tick the right boxes.
Value for money is another prime factor to consider when choosing your bank. It’s vital that you get a good rate on your savings accounts to counter the effects of inflation, and perhaps even more important to ensure that any debt products that you require (mortgage, loans, credit cards) have low interest rates.
The core relationship that you will have with your bank is likely to be centered around the operation of your checking account, so determining the attractiveness of a bank’s checking account options is important. As well as looking at the interest rates (both on creditor balances and overdrafts), you should check whether there are monthly subscription fees and investigate how punitive the charges are if you go into an unauthorized overdraft position.
The factors that we’ve outlined so far all require a certain degree of research and this can be facilitated through the Internet. The growth of money comparison sites makes this easier than in previous times, so there’s really no excuse for not checking out a range of banks before deciding which one you are going to opt for. However, one thing that Internet research will not furnish, with any degree of accuracy, is how good the staff are in your local branch. Speaking to friends and relatives about their experiences can help here but you might also wish to visit the branch and speak to the counter staff. This will give you an indication of how knowledgeable and friendly the staff are.
The focus of this article has been how to select the right bank for your needs, and this implies that there will always be just one bank that you will have your financial relationship with. However, it is increasingly the case that individuals cherry pick where they will hold their financial accounts. For example, I might choose to have my checking account and personal loan with one bank, but may opt to go with other banks for my mortgage and savings accounts. Managing such a disparate financial portfolio is a little less convenient so individuals need to determine which is more important to them between convenience and return on investment.
A final thought on choosing the right bank is that entering into a relationship with your bank is not at all like entering into a marriage. Hopefully, your marriage will last until “death do you part” and you will be faithful to your spouse. However, you should feel free to change your bank without guilt if they fail to live up to their promises in terms of customer service and value for money. Despite this, it is often quoted in banking circles that people are more likely to get divorced than to change their bank! I’m not sure what this is a worse reflection on; either the failings in making marriage work or an indifference to ensuring that we get sustained value from our financial services?!