Get the facts first!
When choosing a financial institution, the Nebraska Bankers Association urges consumers to start with their own needs and preferences first.
If you are considering leaving your financial institution on Bank Transfer Day—or any other day—know that you have choices, but our best advice is to shop your own bank first. Just as your cable or phone company has many different plans to choose from, your bank may have a new product that better meets your needs today.
Here are a few banking tips for you to consider:
Assess your needs–Whether you’re looking for a new bank or evaluating how well your current banking relationship meets your needs, the following questions can help you identify your “banking personality.”
• What is your goal? Is it to save money, borrow money, or maintain a checking account?
• How much money do you keep on deposit each month? How many checks will you write?
“Packaged” or “multi-service” accounts offer a variety of services for one fee. “No-frills” accounts offer a minimum number of services at an extra-low price. Or you might choose a variety of services “cafeteria-style” and pay as you go. Ask about minimum balance requirements and limits on monthly or quarterly transactions. Consider how well you manage your account to avoid overdrafts. If you would like to use an overdraft service, make sure your bank offers it and find out what it will cost.
• Will you buy a home, car, or purchase a big-ticket item in the near future? Ask about the variety of loan products offered.
• What kinds of savings products are offered? Your goal may be to save for a child’s education, a second home, a recreational vehicle, or a dream vacation. Many banks offer uninsured investments, such as mutual funds, as well as traditional insured deposit accounts.
• What time of day do you expect to do most of your banking? Some people find it easiest to go to the bank during their work hours while others prefer to bank close to home so they can visit evenings or weekends.
• Do you prefer to deal directly with bank personnel or are you happier with the convenience of ATMs or services such as mobile or online banking? Banks have added thousands of branches in the last decade as well as more technology options. While some people will choose a bank with branches on every corner, others will opt to do their banking in the middle of the night from home.
Ask a bank representative to review your account–New account features or services may have been introduced that better suit your needs. Allow your banker the opportunity to design a banking relationship that works best for you.
Compare fees, service charges, and interest rates on loans and deposit accounts among different banks.–Every bank sets its own prices based on competition, the need for a particular type of funds, and their own costs of doing business. It pays to shop around.
Price isn’t the only factor for most people in choosing a bank. How comfortable do you feel with the institution?–Are your questions answered quickly and accurately? Do customer service personnel offer helpful suggestions? Will the hours, locations, and options for accessing services meet the demands of your lifestyle?
Look for an institution that is insured by the FDIC.–This means your deposits will be protected up to $250,000. You will find federal deposit insurance stickers displayed on doors and teller windows.
Before you consider switching from your local bank to a credit union, consider the following:
• Despite their reputation, credit unions don’t always have the better rates. Compared to credit unions, banks tend to have a wider range of products and services, along with more convenient locations and ATMs.
• The average Nebraska family paid $5,216 in federal income tax in 2009. Nebraska credit unions paid $0.
• Nationally in 2009, working American families paid on average $6,479 in federal income tax. The $942.5 billion credit union industry paid $0.
• As credit union membership expands, so does the cost to American taxpayers, who underwrite the credit union industry’s tax subsidy to the tune of almost $1 billion a year.
Source: Office of Management and Budget, Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2011
• The National Community Reinvestment Coalition released a study in September 2009 that found banks outperformed credit unions in serving people of modest means. This nationally recognized consumer group specifically called for Congress to apply Community Reinvestment Act rules, which require banks to lend back to their communities, to large credit unions.
Read the coalition’s study at www.ncrc.org/images/stories/mediaCenter_reports/creditunionreport090309.pdf.