How to Choose a Bank or a Credit Union When Opening an Account
Whether you’re opening your very first checking or savings account or simply thinking about changing financial institutions, it’s important to know the ins and outs of how to choose a bank or credit union. There are a lot of variables to consider – and you want to be sure that you’ve chosen the right option for your financial needs.
At Addition Financial, we work hard to educate our members and potential members. We want you to understand what it means to join a credit union – and how it compares to opening an account at a bank. With that in mind, here are some pointers to help you learn how to choose a bank or credit union.
Research Your Options
The first thing you should do is to research your options. Regardless of where you live, you probably have multiple banks and credit unions in your area. It’s important to understand which financial institutions are available to you and what they offer before you open an account.
Part of your research should include the requirements for joining a credit union. Some credit unions service only members of a community or profession. If you’re not eligible, you can cross the credit union in question off your list.
Other items to research include:
Ownership (for example, is the bank owned by a large national bank?)
Account options & features
Customer service reviews
A quick Google search can tell you a lot, as can reading online reviews. You don’t want to be surprised to learn that the bank you choose has horrible customer service after you’ve opened an account. Learn what you can first!
Ask for Recommendations
The next step is to ask your family, friends and coworkers for recommendations. Research is a must but there’s no substitute for first-hand experience. You might find a national bank that has a bad customer service reputation but has a local branch that your friends love.
If someone you know recommends a bank or credit union, make sure to ask them what they like about banking there and what they would change if they could. It’s an open-ended question that can tell you a lot about what it’s like to have an account there.
Consider Your Financial Goals
What are your financial goals? So far, we’ve focused on accounts and services, but ultimately, you want a financial institution that’s going to work with you to help you achieve your major life goals. For example:
Do you want to work toward buying your first home?
Do you have plans to retire early?
Are you in the market for a new car – or a car for your teenager?
Do you own a business – or would you like to start one?
Are you worried about paying for a child’s college education?
Do you need to establish or rebuild your credit?
Asking these questions is a must because it will help you focus on the services and options that you most need. People who need to rebuild their credit, for example, often do better with credit unions than with banks. At Addition Financial, we work closely with our members to help them rebuild their credit.
Interview Your Financial Institution
The next step is one that a lot of people skip, but we highly recommend doing it. Ultimately, there’s no substitute for an in-person visit to the financial institutions you’re considering. You can learn a lot from even a brief encounter at a branch or main office.
When you walk into a bank or credit union, pay attention to what’s happening around you. Does an employee greet you immediately, or are you left waiting and wondering if anybody knows you’re there? Are there long lines or are things moving quickly?
Ask to speak to someone about opening an account. Consider this visit a fact-finding mission. Here are some things to pay attention to:
Does the person you speak to seem interested in your financial needs and goals, or are they focused on trying to get you to open an account immediately?
Are you given the information you need – and does it match what you discovered during your research?
What is the general atmosphere? Do employees seem happy to be there or do they all seem to be stressed? What about the customers?
Bring up a financial goal if the person you’re with hasn’t asked. Ask them how the financial institution can help you attain that goal.
The answers you get – and the attitude of the person you speak to – can tell you a lot about what it will be like to be a customer of a bank or a member of a credit union.
Choosing a bank or credit union is an important step. In the end, after you’ve taken the steps we’ve outlined here, think about your goals and decide which financial institution is the most likely to help you achieve them.