Five Tips When Selecting a Bank Account

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    Apr 04, 2013
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Five Tips When Selecting a Bank Account Photo by Chris Martin

Selecting the right bank account for you is important. Many people will keep their bank account for many years, or possibly for the rest of their lives if they find an ideal bank that can cater for their needs.

Below are our top five tips, we feel are important when you start looking for a new bank. These top tips are ideal for someone who maybe already has a bank account and is looking at changing, as opposed to someone getting a bank account for the first time.

1. Switching Incentives – Banks do offer incentives for people to switch bank accounts. Some offer a cash reward, some offer no account overdraft fees for a set time. It is important here to carefully look at what these incentives mean to you. They may look good from the outset, but it is essential here to look at the bigger picture. They may offer you an attractive cash sum to start, but you may find there is an additional charge for an overdraft, or the interest rates they give may be not as attractive as what you have currently. Spend some time on looking at all the options here.

2. Account Fees – Check if the bank has set account fees, if so what are they for, and at what point are they triggered. Some banks may appear to have low fees, but if for example you go over your agreed overdraft limit what do they charge then? Some banks charge a lot more than others.

3. Interest Rates–A simple but important one! Find out what their interest rates on their current account and savings account are. If you have substantial savings, a favorable interest rate could easily outweigh other charges associated with that bank. Spend some time working out how much.

4. Credit Cards – Does the bank you are considering offer a credit card? If so is there an annual fee? Also you will need to look at the credit limit and of course what the APR (Annual Percentage Rate) interest is.

5. Shop around – Points 1 to 4 are all about you looking at a banks individual offering. However, no matter how good a deal may seem they have competition who are eager for your business, so take advantage! When shopping around get as much information as possible. Go and visit the bank in store and also online. Once you have all the information then you need to sit down, give yourself at least two hours and read, make notes and if possible get advice from someone else. You may like a specific bank, and what they are offering but someone else may spot something you may have missed.

Finding the right bank for you does not have to be daunting. It can be enjoyable – especially if you end up saving money and come away with a fantastic deal. The key is to take your time, look around and don’t be in a rush.

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