Post by Barry Myers
The banking industry has gotten a bad reputation, and it is mostly for good reason. If you choose the wrong bank, you’ll pay ridiculous fees and get very little in return. But that’s not how it ought to be. While I’ll stand up and bash a misbehaving bank right along with you, I want to spend a few minutes sharing five ways you can get the best out of your bank – or how you can evaluate your banking options with other companies if you aren’t so in love with the bank you’ve got now.
- How safe is my money? Banks are probably THE SAFEST place to put your money. You may not earn a lot of interest, but your money is pretty darn safe. In the U.S., the government guarantees up to $250,000 through the FDIC (banks) and NCUA (credit unions). So while you might be tempted to keep it under your mattress, your cash is a heck of a lot safer in your local bank.
- Can I access my money online and in person? I check my online banking almost daily. I’m a nerd. What did we do before it? This option is convenient, almost real-time and FREE. If it isn’t available (and free) at your bank, find another bank. But equally important to me is getting to see real people at my bank. In a world where purely online banks are common, I’m sticking with brick and mortar institutions. More on that in #4.
- Do I get a free debit card/ATM usage? I don’t use a credit card. I don’t have a credit card. But I can still rent a car, buy things online, pay at the pump for gas and just about anything else I want when I roam around with my debit card. I love my debit card. Cut up every other piece of plastic in your wallet and start using your debit card immediately. If you run it as a credit, you get the same protections as a credit card and you can’t overspend because you can’t “charge” more than is in your account.
- Do they know who I am? If the people at the bank know you, it makes things a LOT better. Banks often have staff called “relationship managers” and they’ve started referring to you as “clients” rather than customers. Why? Because they recognize if you build a relationship with them you’ll stick around. This works both ways. Most of us have one or two branches of our local bank that we visit because they’re convenient. Make an effort to get to know the people there. Skip the drive thru when time allows and go inside. Ask the teller how he/she is doing, etc. Go back to Business Relationships 101 and build from there. If you don’t have a bank where this is possible, find one.
- Can I get a loan? I don’t encourage debt in any form. I just don’t like it because it adds risk to your financial equation and that’s just not cool. But I realize most people (myself included) couldn’t buy their first house without help from the bank. Do you know how much easier it is to get a mortgage if you can walk in, sit down and talk face-to-face with the mortgage lender? While I’m not going to cheer you on if you walk in and ask for $50,000 to buy a ski boat, I promise going in to ask for $50,000 toward the purchase of your first home is easier/faster/more possible if you’ve got a bank you love.
Because I don’t want to write a book on the subject, I’ve kept my tips fairly short. However, I know there are lots of other benefits out there to help you make the most of your experience. If you have a few banks in your area that might fit the bill, you should consider interest rates and other benefits. In other words, you may need to do a bank account comparison before you decide on the right bank for you. Notice I skipped over things like interest rates, minimum balance requirements, etc., etc. With a bank, that stuff is secondary to me. But don’t avoid those details!
What about you? What are some ways you get the most out of your bank?