Trying to choose a bank account can be overwhelming. There are so many different options and things to consider when opening an account, it can be tough to even know where to start. Let’s talk about how to choose a bank account that will save you money and headache!
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How to Choose a Bank Account – Getting Started
The easiest way to get started figuring out which bank account will be best for you is to make a list of banks and accounts you want to research. There are so many banking options today that it can be daunting to even know where to start. I would list out 3 local banks and 3 online banks to research and start from there. As you go through the rest of this guide, you can write down the pros and cons of each of the accounts you research — this will make it easier to pick one when you’re done!
If you want to skip down to my review of Chime banking, I cover the basics of Chime and why I love using it!
Things to Look For When Choosing a Bank
Using a local bank is probably the most common way people set up their first bank account. These banks are established in the area and usually have a pretty wide net of ATMs. You can easily order checks and get a debit card the same day you open your account at most local banks as well.
It’s convenient to be able to go into the bank to set up an account and handle transactions. You are able to stop by and ask questions in person. However, since these banks have to pay to keep up their physical locations, often there are fees associated with the accounts they offer. You also want to check on how user-friendly the bank’s online banking and mobile banking platforms are if you plan on using those often.
Online banking has become more and more popular. With online banking, 100% of your transactions are done through the bank’s website. Usually, these banks don’t have any physical locations and operate through an already existing network of ATMs. Most of these banks will still provide checks to customers as well.
Since online banks don’t have the overhead of running actual locations, you often can find accounts with no fees. You want to find an online bank that has good customer service since the only way to get any questions answered is through their website or over the phone.
One big thing to check when considering an online bank is whether it is FDIC insured. You want a bank to be FDIC insured because this protects the money you deposit in the bank in the event the bank fails. With online banks this is important. Usually, online banks are much smaller and have not been operating for near as long as big brick-and-mortar banks, so you want that insurance in case the bank ends up not being successful.
Things To Consider When Choosing a Bank Account
It seems like every bank offers multiple different types of bank accounts, with different fees, balance requirements, and access abilities. Let’s break down five of the main things you should be thinking about when looking into an account.
1. Bank Fees
Find out what kind of fees are charged for the different types of accounts the bank you are researching offers. You want fees to be as low as possible. Stay away from banks that charge monthly account maintenance fees, transaction fees, or fees if you don’t have a certain number of deposits during a month.
Some banks will waive fees if you opt-in to online banking, electronic statements, have a certain number of direct deposits a month, or participate in other specific activities. If it’s not a big deal for you to meet these requirements to avoid the fees, then it may be fine for you to go for this account. However, there are plenty of banks that don’t charge fees at all (especially online banks), so it’s not worth making your banking complicated to save a few bucks.
2. Minimum Balance Requirements
Many banks have requirements for how much money you have to keep in your account at all times in order to avoid getting charged a fee. This is something you definitely want to check on if you are using a brick-and-mortar bank. Many online banks have no minimum balance requirements.
For a personal bank account, I would recommend looking for an account that has no minimum or a very low minimum balance requirement. Not many people leave a lot of money sitting in their checking all the time so you want to avoid an account where you could end up getting charged a fee if your balance drops too low.
3. Ease of Access
Easy access to your money is very important. Check out the online banking and mobile banking services for the accounts you are interested in. You don’t want to choose a bank with a platform that is not user-friendly if you will be banking on the go a lot.
You also want to consider your banking habits. Do you prefer to stop into the bank to make a deposit, or are you using an ATM to deposit cash or snapping a photo to deposit a check? This could determine whether it would be better for you to go with a physical bank over an online option.
4. Transaction Limits
Transaction limits for most banks are high enough that they don’t affect the average person doing personal banking. Check the limits on how much money can be withdrawn from an ATM in a day, if there are any restrictions on the number of debit card purchases that can be made, and how many transfers can be made between bank accounts (if you have more than one).
Keep in mind that there is a federal limit on the number of transfers you can make from your savings account to your checking account in a month. You are allowed to make 6 withdrawals from your savings account per month. If you want to make more than 6 withdrawals, you will have to go into your bank, withdraw cash at an ATM, or your bank may charge you a fee. This is something to consider, especially if you are planning to use an online bank.
5. ATM Fees
Look for an account that provides ATMs without any fees for withdrawing money. Usually, banks have a network of ATMs they directly run or work with that you will be able to use fee-free. If you use an ATM outside the network, a fee is usually charged by the bank operating the ATM.
Some banks will even reimburse you for fees you get charged by other ATMs. Consider the locations of ATMs that are both in and out of a bank’s network when considering using that bank. If the ATMs are not convenient and you know you’ll be withdrawing money often, you may want to look at other options.
I Love Chime Banking!
I opened an account with Chime Banking for my business banking, and I have to say I am loving it so far! Chime is an online bank that offers spending and savings accounts that have A LOT of awesome features.
How Chime Works
Chime is a bank that operates completely online. They are FDIC insured and provide customers with a Visa debit card that offers all the protection that comes with any other Visa card. There are over 38,000 ATMs (with no fees!) and there are also over 30,000 locations where you can receive cash back.
Chime offers both online and mobile banking. You are able to deposit checks through their mobile app and transfer money between bank accounts. You can even link an account with another bank to your Chime account. The mobile app is extremely easy to use and I have never had any issues with it crashing or not working correctly.
You are able to send checks with Chime, but they are mailed directly by Chime and can take 3-9 business days. Chime offers bank-level security to customers, so you know your money and personal information will be kept safe.
They also have a great referral program — if you use my link to sign up for an account with Chime, you and I will both get $50 when you receive a direct deposit of at least $200!
Early Direct Deposit
One of the most unique features offered by Chime is early direct deposit. You can receive your money up to two days early! When you set up your direct deposit with Chime you are automatically eligible for the program. Chime makes your funds available to you the day your employer deposits the money into your account, instead of leaving it pending for several days. Chime even has a direct deposit form on its website that already has the banking information filled out for you, that you can download and provide to your employer!
Spot-Me Overdraft Protection
Spot-me is overdraft protection that lets you make a debit card purchase that will overdraft your account by up to $20. There are no fees associated with the overdraft, but this protection is only available for debit card transactions. The next time you deposit money into your bank account the overdraft amount is automatically applied to the negative balance. You can enroll in this service as long as you have a regular direct deposit of at least $500.
Auto Savings Feature
You can set up your Chime Spending Account to help you save money without having to think about it. The auto savings feature rounds up any debit card purchase to the nearest dollar. The amount that was used to round up the transaction is automatically transferred to your savings account.
So if you make a purchase for $5.50, auto savings will round that purchase up to $6.00. 50 cents will be transferred to your savings account. The more you use your debit card for purchases, the more money you will end up saving! You are able to turn this feature on or off at any time.
No Fees or Minimum Balance Requirements
Chime has no minimum balance fees, no monthly fees, and no overdraft fees. The only fees charged by Chime are for ATM withdrawals that are not done at MoneyPass ATMs. The fee for these withdrawals is $2.50 — which is lower than a lot of other banks. You may also be charged a fee at ATMs that Chime does not partner with, but this fee is charged by the bank that runs the ATM, not by Chime.
How to Sign Up
Getting signed up with Chime is extremely easy and convenient. I was able to sign up for my business account in about 15 minutes online and get my personal bank account connected. Once your spending account is set up, it’s really easy to add on a savings account right away. Your Visa debit card is mailed to you within a week or two. It’s easily activated online and you’re good to go!
If you use my link to sign up for your Chime account, you’ll get $50 when you receive a direct deposit of at least $200! (Plus I get $50 too!)
The most important part of choosing a bank account is making sure it fits your needs and your lifestyle. Banking shouldn’t have to cost you a lot of money or be complicated. Shop around and do your research before committing to a bank account so you can save money and have a stress-free banking experience.
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