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Things to Look for When Choosing a Bank and Bank Account

Gone are the days when banks could get away with charging excessive fees and offering low-yield checking and savings accounts. Times have changed for the banking industry, and we know you’re different too. You deserve better choices and more flexibility when it comes to banking.

When shopping around for the right bank that offers the most optimal types of accounts, make sure you look for these two criteria:

  • Banks that lets you access your money for free
  • Banks that help you grow your money

Don’t settle for high fees or low APY

Bank Fees

Have you ever looked at the fine print on a bank account? Does it slip in language about minimum balances and hidden fees?

While some services, such as wire transfers or returned checks, will always carry a fee, look for a bank that has no services fees associated with basic checking and savings accounts. You shouldn’t be charged to access your own money. If your bank has a service charge of $12 a month just to maintain a basic checking account with them, consider finding a new bank.

ATM fees

ATMs are another way banks rack up fees. If you’ve ever used an ATM from a bank other than the one you belong to, you’ve probably seen the $3 charge that you’re asked to accept before withdrawing your money. Usually, your bank will also charge $3 on the same transaction for using a different bank’s ATM. You’ve just paid $6 to withdraw your cash from your account.

There are better options. Look for banks that have no worldwide ATM fees and that will reimburse you for charges incurred from the other bank whose ATM you used. Some banks cap the amount, so watch out for that too.

What to look for in a checking account

Your money should work for you all the time, whether it’s in an IRA, 401K, savings account, or checking account. Yet most traditional banks put restrictions in place that prevent you from earning interest on checking accounts.

For example, many banks require a minimum balance of $10,000 in checking to earn an annual percentage yield (APY). But most people don’t carry balances that high in their checking accounts. When choosing a bank, look for one that has low balance minimums to earn APY. 

Then, be sure to shop around for the best APY rate available. Don’t settle for APY rates as low as 0.005%. Find a bank that will give you a better return of at least 0.50% APY on your checking.

About the author

Kathleen Barrett

As the Director of Marketing at LendingClub, Kathleen has had experience in the financial services industry for over ten years. Ten years ago, while working for a non-profit focused on helping consumers work their way to financial freedom, Kathleen found her passion for financial education. Her current role puts her at the forefront of online banking trends, allowing her to share her expert advice for your personal financial needs.