A lot of us inherit the financial institutions of our parents, mainly because they set up our bank accounts for us when we were just little tackers who were too young to do the comparison shopping ourselves.
As a result, a lot of us sail through our young adult lives with a bank we didn’t actually choose, and which may not be giving us the best deal on the market. Fortunately, the advent of the Internet has made finding the best banks infinitely easier. The secret is knowing what to look for.
Here’s what to look out for when choosing a bank.
Cost of account setup and maintenance
Try and get a ‘fee-free account’. There’s no reason for you to be lumped with setup fees when it comes to bank accounts. While you may have your eye on a promising bank, make sure you know any associated requirements with the account, such as minimum monthly deposits and balance.
Low (or no) fees, and no fee surprises
There are a bundle of possible fees your bank could slap you with once you’ve opened an account. These include overdraft fees, maintenance fees, account closing fees and more. A great way of avoiding these (and leaving more cash in your accounts) is by looking for banks with fee-free checking accounts that also have fee-free ATMs and no overdraft fees.
If you’re a bit of a jet-setter, you may also want to look at their international ATM fees as well.
Legitimacy and trust
You’ll want to make sure the bank you choose is one you can trust, so make sure your bank is an Authorised Deposit-taking Institution (ADI). This means your deposits are covered under the Australian Government guarantee scheme for up to $250,000.
It’s also important to check that any bank you may be considering has security and fraud protection. This includes two-factor authentication, which basically means you have to jump through one extra hoop to verify your identity, but it also means your money’s that much safer for it.
Basic fraud protection means the bank will monitor your account activity, alert you to any suspicious behaviour, and reimburse you 100% of any unauthorised amount taken from your account. In this instance, a small account fee may be a small price to pay for 100% peace of mind.
Fraud protection should also extend to any credit cards issued by the bank. This way you are more protected if your credit card is compromised.
When choosing your bank, it’s important to factor in convenience. This includes things like how close you are to ATMs, whether the bank has a mobile app (that’s user friendly!) or online tools that help you create savings goals.
Most of the big Australian banks announced recently that they were making their ATMs fee-free in 2018, many of the other smaller banks still charge you those few extra dollars if you use one of their ATMs.
You can get a pretty good indication of an app’s usability by jumping on the app store and reading recent reviews, similarly the bank’s website should be able to tell you about any helpful tools and capabilities like goal setting and tracking.
Good customer service
It’s worth having access to reliable customer service when things go wrong.
Everyday people get their cards eaten by ATMs, their money accidentally transferred to the wrong person and even their credit cards hacked. In these instances, it’s invaluable to have a good customer service team on call to help you retrieve your money.
Because there are so many banks competing for your business, there are many great deals and options to suit everyone out there, you just have to know what to look for.
Got your banking sorted? Find out whether investing can help you grow your wealth with our free personalised financial health check.
Also published on Medium.