How to pick the best bank
I’m surprised how often clients tell me that they… hate their big bank and go to a smaller bank because the smaller bank “cares more.” Ladies and Gents, that is a bunch of wishful thinking. They care the same. They are all in the business of having your money, and they want you to make them money. That’s the name of the game they are playing, and that’s OK! Your relationship with your bank should be a financial one, not an emotional one.
That being said, there is a way to pick the best bank for you. I’ve created a little handy-dandy checklist. It covers everything you need for your bank to serve you best.
(1) Above all, your bank has to be convenient. This means it’s easy to get money out of it without incurring a fee. Even if you don’t use the ATM often, you will use use the ATM. So, ease-of-use is paramount. (Do not underestimate the power of “I already know that information.” If you followed this one guideline it would make you more money in a year than the interest on the entire account.
(2) Connects easily with Mint.com or a similar site. I’m a huge believer in seeing your spending in real time. (This changes your spending behavior, and allows you to save more without even trying.) To do this you need to have a account at Mint.com or a similar type of site. Mint does not do very well with small banks, as there are frequent connectivity issues. Because of this I recommend going with a big bank. (FYI: I don’t make any money from Mint.)
(3) No re-occurring monthly fees. Some banks have a monthly fee, but this can be rigged to get the fee waived by doing something like signing up for direct deposit or keeping a $500 minimum. TD Bank is pretty great with their fee structure, but remember your ideal bank has all of the things on the checklist. A way to avoid some of the fees is to simplify the number of accounts you have. All you really need is a checking account. Savings accounts don’t keep money saved and they usually end up costing money due to the fees. Check out this blog post for an extended talk about that.
That’s the three-point checklist that you want to hit. Ease-of-use. Connects to Mint.com, and has no monthly fees. The interest rates are not important. Your future fortune is not made on the interest accrued in your savings or checking account. It’s dismal. And any time spent on the pursuit of this activity is wasted.
In conclusion, don’t get caught up in trying to love your bank. Make your bank work for you.