A friend of mine recently asked me what I thought about which bank they should use. While I have already talked about the best place to open an online bank account, this doesn’t include the every day uses. A high-interest online bank account may be beneficial for an emergency fund, but you still need a physical building to for your day-to-day cash management. If you are wondering what type of bank to use, you should consider the pro’s and con’s of the different forms of banking.
Credit Union
I grew up with my first savings account at a credit union. A credit union is a member-owned bank that is controlled by the members of the bank. Often times membership is restricted to employees of a certain employer, or even limited by geographical location of residence. I remember growing up and receiving some of the best customer service at my credit union. When I needed to deposit checks, I would simply walk up to the teller, hand him/her the checks and tell the teller my account number (I had it memorized). When I say the best service, I mean the absolute best! They didn’t require me to fill out any unnecessary forms or go through steps A, B, and C. It was simple and aimed to keep it convenient. To my surprise, they even offered competitive interest rates. Talk about service!
National Bank
Yet, banking at a credit union that was restricted to my home state after I moved across the country was not a legitimate option. I was forced to find another bank. This time, I knew that I wasn’t guaranteed to stay in one spot for a long period of time, so I decided to go with a large, national bank. While I am not usually a fan of corporate banking from large institutions (like Lloyds Bank), I know that by banking at a national bank, I can access my money almost anywhere. The bank that I chose has branches in almost every place in the U.S. and is one of the most well-known banks. So, if I choose to move in a couple years, I won’t have to go through the hassle of changing banks. Plus, when I am on vacation within the states, it is easy to access my money.
Yet, what I gain in convenience and numerous locations, I lose in the customer service. I lost the personal feel, being greeted by my name and am known only as an account number to the teller. I am always required to fill out the annoying form. It often leaves me wondering what form of business model America is moving towards when we lose all sense of personal interaction and respect, and instead focus on efficiency and inflexible processes.
Deciding where you should bank should be a decision that is taken carefully. It is necessary to weigh the options and find out which benefits are most important to you. It’s doesn’t mean it will always be an either-or situation, as has been my experience.
What’s important to you when you are choosing a bank?
photo credit: Brian Giesen via Flickr
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I belong to a credit union. The rates are great and the customer service is wonderful.
Totally disagree. We do all of our checking and saving with online accounts. We have no need for brick-and-mortar banks and haven’t in years. Why do you think they are necessary?
I see that the system is going towards that, but I still get occasional checks or cash that I like to deposit into my account (instead of having it sit around). I don’t like the idea of having to wait days to send it via mail and especially wouldn’t mail cash. I do like the idea of being able to scan checks to deposit them, but my bank charges a fee.
If you have ways around this – please feel free to share. I’d love to not have to go to the physical bank.
We now use scanned check deposit with Ally, which is free. I think ING is offering something similar. That’s a lot more convenient that physically going to a bank branch. Depositing cash has never come up for me (it’s quite rare that I handle cash or checks), but looking at Ally’s website it seems that they don’t accept cash deposits. Before the internet banks instituted photo/scanned check deposit I would sometimes deposit checks in the ATMs of my linked brick-and-mortar bank account, so I guess you could do that setup if you wanted to migrate the majority of your banking to the online banks but still keep the tether to the brick-and-mortar ones. I agree with you that things are moving in the totally-online direction though, so maybe you could get ahead of the game and not handle non-trivial amounts of cash? Sort of a chicken and egg issue.
I still don’t think online banking is at the point where it can replace a brick-and-mortar bank. Cheques are still too frequently used, at least up here in Canada, that a traditional chequing account is still mandatory for most. Given that we have so many fewer banking options in Canada, its not a hard choice to go with one of the National banks, though there are a few alternative options. I know many people who just bank where their parents banked because that’s what they know and they have a banking history there.
I bank with USBank. The reason I love them is their friendliness. They are so accomadating towards my banking needs. customer service won me over on this one.
I bank with 5/3 bank, they are relatively small but still have a presence in my region which for me seems to provide the best of both worlds. Most large national bank convienences but also that good community bank customer service and attention. They know my name and all of that good stuff and whenever i have simple questions they give me really good solutions i never even knew about. I recommend.