Finding The Right Type of Bank for Your Needs

Today the current economic depression has consumers exploring other choices to traditional banking. For years bank customers walked or drove to their local bank, made deposits and withdrawals, cashed checks, used the ATM, negotiated loans, and talked to the branch manager. Interestingly these same consumers are now seriously considering using both types of banking.

Since there are advantages and disadvantages to both banking methods, how do you find the right bank for you? To make a decision that serves your best interests, you must first look at the advantages and disadvantages of both.

Here are a few traditional banking advantages and disadvantages:

Advantages of Traditional Banking

  • You have easy access to and personal contact with the bank manager and other bank personnel.
  • You can write counter checks, purchase bank checks, and deposit checks with a person.
  • You have access to inside bank depositories, and can deposit or withdraw funds day or night all year round.
  • Provide personal loans, mortgages, universal ATM access, and online banking.
  • Federal Deposit Insurance (FDIC) protects your account up to $250,000.
  • You can transfer funds, buy certificates of deposit, and open an IRA account.
  • Online bill paying so that you can easily track your income and expenses.

Disadvantages of Traditional Banking

  • Minimum checking account balance fees.
  • Insufficient funds fees
  • As a rule savings interest rates are lower than those paid by online banks.
  • Higher interest rates on loans
  • Inconvenience since generally open from 9:00 AM to 5:00 PM.
  • Other miscellaneous fees.

Scores of large companies have started offering online options to provide personal financial services to a growing consumer base. By using online capability, these companies achieve the tremendous advantage of lower costs over their traditional competition. They reduce or eliminate bank personnel, leases, rent, buildings, and all the other expenses paid by traditional banks.

Even though convenience is one of the most important advantages of online banking because you can do your banking without leaving home, there are, however, several other important advantages:

Advantages of Online Banking

  • With a computer and internet access, you have worldwide banking readily available.
  • There is no waiting in line, which saves you time and money.
  • Similar to traditional banking it is easy for you to buy certificates of deposit, create IRAs, bill pay, and transfer money.
  • Your bank statements and bills sent to you electronically.
  • 24/7 banking 365 days a year.
  • Full access to many state-of-the-art computer money management programs.
  • Pay higher interest rates than traditional banking.
  • No fee checking accounts.
  • Unlimited free online transactions.
  • Federal Deposit Insurance (FDIC) protects your account up to $250,000.
  • Many other special incentives like cheap checks or reward programs.

Disadvantages of Online Banking

  • Do not have branch bank locations.
  • Unable to make cash deposits.
  • Do not have their own ATM machines.
  • Charge high ATM fees to withdraw cash from other banks.
  • Computer problems create slow transaction processing.
  • Possible hacker attacks gain access to your account information.
  • Difficulty changing banks online.
  • Must have an Internet Service Provider.

What’s the right choice for you?

The average person will alter their ideas and actions when they are certain that the change will be in their best interests. No person deliberately plans to make the wrong decision. Take the time to use every available means at your disposal to gain more knowledge about traditional and online banking so that you can find the right bank for you.