Selecting a financial institution to help you manage and grow your money is a big decision. Most people have many options, including local banks, online banks, credit unions, and specialized locations. Different banks offer various services and have different fee levels. To choose a bank that fits your needs and goals, you must look at all these areas carefully.

Understand Your Banking Needs

Consider what you need in a bank or credit union to get started. What types of accounts do you need to use? This could include checking and saving accounts and investment accounts for some. Do you need a bank that offers in-person transactions through local branches, or do you prefer a digital bank that lets you do everything you need online?

Some financial institutions offer features to allow you to quickly transfer funds between accounts, pay peers, and manage specific savings opportunities. Do you plan to do a lot of borrowing, such as to buy a home or a car? If so, you may want a bank with the lowest loan costs.

Finding the Banking Experience You Want

Make a list of what is most important to you. Then, consider which financial institution offers the best overall experience and provides those services to fit your needs. Here are some key elements that define the majority of the following institutions.

National Banks

Big national banks are the most readily available providers. They typically have larger budgets and tend to offer most services and digital tools. These banks are mostly for-profit and, as such, they are focused on providing services that generate revenue. Some key aspects of national banks include:

• It’s easy to find branches and ATMs for these banks even when traveling throughout the country.
• Most offer apps and online banking tools, some of which are the most robust.
• Many offer budgeting tools, bill payment tools, and educational resources to help you make wise decisions.
• They tend to charge fees for many services, though some are more affordable than others.
• It’s harder to get personalized attention here. If you need help with a financial situation, the decisions will likely be made based on credit scores and financial data rather than relationships.

Regional and Community Banks

Regional banks are smaller banks. Some are community banks. They may have a few branches or be a stand-alone financial institution. Because they are smaller, they tend to offer more personalized service overall. They are also operating in the community and with the community, with many giving back to area organizations. Some key expectations here include:

• Less bureaucratic elements are used, which means they are more likely to have the freedom to provide personalized financial services to you.
• Smaller banks tend to be more willing to lend based on more than just credit scores, putting a personal touch on the service.
• They don’t have as many branches, making them more challenging to use when traveling.
• You can come in to speak to a teller or banker, but their online services may not be available (or may not be as robust).
• Some smaller banks need to charge higher fees because they do not have a national network to count on. Fees can range from moderate to high here.

Credit Unions

Credit unions are significantly different in their operating model. They are member-owned, meaning those who open accounts within credit unions own a bit of the company. This allows them to be more focused on providing services than growing profits. Many are non-profit organizations. This creates a few key benefits for borrowers. Some key features include:

• Credit unions tend to have the most affordable fees for traditional financial institutions. They often offer better rates because they do not have as much profit focus.
• Most credit unions are very member-oriented, offering loans and better interest rates and terms based on the unique needs of their members. This allows credit unions to be more flexible about things like credit scores.
• Some credit unions are more modernized than others. You may find many with digital features, but because these cost money to upgrade to, some organizations have yet to implement robust digital tools.
• Some have membership limitations, meaning you must be a part of the group or organization to gain access or live in a specific geographic area.
• Credit unions do not often have large networks of banks. Some are larger than others, but many are very regional locations.

Online Banks

Online banks are different types of financial institutions. Some offer robust borrowing and lending features though they operate solely online. There is no doubt these are newer banks, but they offer tools many appreciate. Some key features of online banks include:

• Without the overhead costs of brick and mortar branches, they can typically offer more affordable and even free services.
• Many include digital tools for investing and applying for loans.
• The big downfall is that they offer no in-person services, and sometimes online or over-the-phone services are limitedly available.
• Many have lower account requirements, which is a good option for those just starting out.
• Some online banks have limits on the services they offer, while others are more robust.

Digital or Neo-Banks

A neo-bank or digital bank typically offers a minimal number of services but some of the lowest fees available. These are online-only banks without a physical branch to visit. That can be limiting to some. Key features include:

• Exclusive online access to the bank, often through an app, is the biggest defining factor for these banks.
• Many do not offer a large number of services but rather basic services to meet client needs.
• Fees and costs for using these banks tend to be low, but this also varies based on the service selected.
• While many online banks are associated with a larger national bank or other brick-and-mortar locations, neo banks are fully online.
• These are some of the newest types of banks, which means you must verify their security before investing.

Review Terms and Conditions

Before you can choose a financial institution:

• Read through all of its terms and conditions.
• Learn about fees, requirements, withdrawals, and deposit timelines.
• Be sure you understand anything you could pay for throughout your banking relationship.

Understand Account and Service Fees

Always compare the fees and access to bank or credit union accounts. Don’t look at what the company wants or advertises but what is available to your specific account selection. You also want to learn about any penalties or limitations on using your account, such as fees for not keeping enough deposited.

Branch and ATM Locations

Having cash on hand is essential even in today’s society. Most banks have ATMs available to you, and Digital banks may not. For that reason, you may want to consider how you can access cash when you need it and the cost of doing so.

Online and Mobile Banking Offering

Many credit unions and traditional banks offer online tools for accessing and managing your finances. Don’t feel you cannot get digital services from a larger bank because they do not call themselves a neo bank.

Which bank is right for you? Focus heavily on what features matter the most to you, and then look for the financial institution able to offer the lowest rates.