checking accounts

How to Choose the Best Bank for Your Checking Account

This is a guest post by Millionaire Mob, an early retirement blog focused on investing advice and travel hacking. 

Your checking account is one of the most important decisions you will make for the next few years. Choosing a checking account is one of the most highly underrated financial decisions you’ll need to make. Why?

Why Checking Accounts Are Very Important

Well, checking accounts provide you a gateway to a service provider for loans, mortgages, credit cards and more.

And, most importantly, checking accounts have extremely high switching costs. If you are like me and plan on finding additional income sources, your checking account becomes more and more important over time. Right now, I have over 10 different income sources feeding into my checking account. Not to mention all the investment accounts that I send out money to.

So, how do you find the right bank account for your checking account right away?

Ways to Find the Best Bank for Your Checking Account

There are several key features for choosing a bank for your checking account, regardless if it’s your first bank account or your last bank account. Let’s evaluate several key ways to find the right bank for your checking account.

  • Convenience is King

I’m a big traveler and have a number of different passive income sources. Sometimes I receive checks for my passive income activities. Therefore, I need to find ways to cash a check on the go. Therefore, I want to find a bank that has locations nationwide.

I don’t know about you but running around city to city to find a bank doesn’t sound appealing to me. In addition, banks need to have online check cashing options for me to be able to get work done on the go.

  • Fees, Fees and Fees

Surprise! We live in an age of technology now. Banking has been an industry for ages. It isn’t going anywhere. However, with the rise of financial apps and online banking, fees should really be a thing of the past. You can easily move money online through using routing numbers to your various investment accounts.

Choose a bank that doesn’t charge for having a checking account open, even if the bank gives you interest on your account. It simply isn’t worth it. Also, if a bank is willing to nickel and dime you for costs related to your account. Avoid them. Something tells me that they won’t be pleasant to work with in the future.

  • Optionality Helps

This point plays into the convenience point. However, we want convenience in the form of service offering. If you bank with someone for a long-time, they should appreciate your business and provide various services such as loans, mortgages and credit cards at competitive rates to their peers.

There’s no reason why you should choose a bank that will limit your ability to further expand your financial capabilities. 

  • Investment Advice

Banks will often offer investment advice in addition to traditional checking and savings accounts. If you can choose a bank that provides free investment advice or consultations, use them. This can be a great way to start your personal financial planning future.

If you are going into the branch and they have an in-house financial advisor, you can meet with them annually to get a checkup on your financial goals for retirement. I would suggest that you don’t sign up for their investment services, but rather just use it to implement it into an index investing strategy. Nowadays you shouldn’t have to pay a lot of many to invest effectively and efficiently. You can use one of the many robo-advisors that provide an automated investing strategy.

  • Security (Technologically and Financially)

This could be the most important component to choosing the right checking account. With cybersecurity an everlasting issue that won’t go away anytime soon, you need to select a bank account that has significant controls in place to combat cybersecurity. We all know about the massive data threats that have harmed our banks and precious information. If I’m choosing a checking account for the first time, I want to ensure that I’m choosing one with the most sophisticated data protection services in the market.

In addition, there’s actually another component to this, security doesn’t just stop with technology. You need to select a bank that is well-capitalized and is insured under the Federal Deposit Insurance Corporation (FDIC). The FDIC is a United States government entity that provides deposit insurance for banks and other savings institutions. It means that any amount up to $250,000 will be insured by this agency. During the Great Recession, we saw a number of banks fail or crash in capitalization. If that happens, it isn’t always as easy as getting your money back.

Stick with a bank with a strong balance sheet rather than a new app that doesn’t have the FDIC safety and soundness.

  • Take Advantage of Bonuses!

The banking industry has become much more competitive than prior years. Many of the large banks are fighting over new business and they are willing to pay you for it. There’s plenty of banks out there that will provide you with a handsome upfront bonus simply by opening a checking account with their institution.

Why not? It’s basically free money!

Conclusion on Finding the Best Checking Account

Finding the right bank isn’t always as straightforward as you think. You need to consider several considerations that give you the best bang for your buck (literally) and convenience you need to make your life easier. I’ve banked with large banks and credit unions in my past, but one thing remains constant, changing your checking account becomes more of a headache with the different income sources that get integrated into it.

When you are young and have only one paycheck, changing your bank account is easy. It’s certainly not easy when you have 12 different income sources and a number of different investment accounts.

Save time and money by choosing a checking account that provides you the following:

  • Instant access to cash (it’s your hard-earned money isn’t it)
  • Reliability and safety
  • Optionality to help you improve your financial future
  • A dedicated team that is aligned with your financial goals to help you save money

What are you going to do with your next bank account? Please let me know in the comments below. I’d love to hear from you.

Author Bio: Millionaire Mob is where people come together to find the best travel deals and financial advice. We specialize in dividend growth investing, passive income and travel hacking. Our advice has helped others travel the world and achieve financial freedom. Follow me on Facebook, Twitter and Instagram.

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