4. Make sure the bank is FDIC insured
It's a good idea to double-check that your bank has FDIC insurance (Federal Deposit Insurance Corporation) before you open an account. This protects your money up to $250,000 per account per bank in the case of bank failure. To check, navigate to the FDIC BankFind Suite webpage, enter your bank's name, fill out details, and click Search.
Credit unions are insured by the National Credit Union Administration (NCUA), which has the same function as the FDIC. Check if a credit union is insured by using the Find a Credit Union website to check whether it's classified as a federal credit union (FCU). All FCUs are NCUA-insured.
5. Look out for account fees
Account fees can cost you a lot of money. Here are some fees to look for:
- Monthly maintenance fees: Some banks charge you to be a customer. You may be able to avoid this by fulfilling certain requirements, such as having a certain number of direct deposits, but you need to be aware of what the rules are for charges.
- Out-of-network ATM fees: If you use an ATM outside of your bank's partner network, some banks charge you for doing so. Others not only won't charge, but may even reimburse any fees imposed by the out-of-network ATM.
- Dormancy fees: These would be fees that are charged if you don't keep your account active.
- Overdraft fees: If you spend too much out of your bank account, you may be charged an overdraft fee.
- Paper statement fees: Some banks charge if you want paper rather than digital statements.
Ideally, you should look for an account that allows you to keep fees to a minimum.
6. Check out the account's benefits
You'll also want to find an account that provides as many benefits as possible. Some things to look for include:
- ATM fee reimbursement: This means your bank pays you back if an out-of-network ATM charges a fee.
- Overdraft protection: Your bank can stop you from getting hit with a fee or getting a transaction declined, often by temporarily moving money from elsewhere.
- Budgeting and financial education tools: Some banks offer budgeting features, free credit scores, and other tools to help manage money.
- Attractive interest rates: Savings accounts pay interest and some checking accounts do as well. A higher rate means your deposited funds earn more money for you.
- Secure online banking: You want to be able to sign into your account online without worrying about fraud.
- Debit card rewards: Some banks provide rewards for using your debit card, similar to credit card rewards.
Not all banks offer all of these features. Decide which are important to you and look for a bank that offers the most perks possible that you're interested in.
7. Evaluate the bank's mobile app
These days, many banks let you manage accounts online. Even brick-and-mortar banks like Chase and Wells Fargo offer free apps in the App Store. Check customer reviews for the good, the bad, and the ugly. Some in-app experiences are clearly superior.
You'll want to pay attention to functionality as well. Will the app allow you to chat with a customer service representative? Can you deposit large checks right from your phone or mobile device?
8. Read the bank's customer service reviews.
Customer service is important, especially if you choose a brick-and-mortar bank. Check out online reviews on verified sites like Trustpilot. Do different customers mention the same issues? Are they generally happy with how the bank handles money issues?
Cross out banks that consistently mention things that displease you. Reviewers tend to be angry or ecstatic, so reviews are typically biased toward the worst and the best experiences banks offer. The key is to look for issues brought up again and again.
9. Open your account
Finally, after comparing fees, benefits, perks, and finding a bank with a mobile app you are comfortable with, you can apply for an account. You can open your account as an individual or jointly with a spouse, partner, or other friend or loved one. You can also open a business bank account if you're running a company.
In most cases, you can apply for an account online and get instant approval. You can fund your account with a transfer of money from another bank if you have access to one, or by making a deposit on your phone or via ATM or teller. You can also arrange to have paychecks and other income sources, such as Social Security benefits, deposited directly into your account.
Once you have opened the account, be sure to manage it wisely by keeping tabs on your balance and watching the fees you pay. Hopefully, you'll have chosen a bank you are happy with and can keep your account open for a long time.