But a poor widow came and put in two very small copper coins, worth only a few cents. – Mark 12:42
When Krista and I got back from our honeymoon we went through the process of joining our lives together. Our vows emphasized that we wanted to share everything and when we got home we experienced first hand what it takes to ‘share everything.’ In the weeks following our honeymoon we began the process of joining. We went to our state social security office to get Krista’s last name changed (a decision I left up to her), we went to the DMV to get her license updated, I moved my stuff into our new apartment and finally we chose a bank. We had agreed that after we were married our finances would be shared, and we would have joint accounts. We wanted as much accountability as possible with our money, and having everything together ensured this. What we didn’t anticipate was how important and challenging choosing our bank would be.
Choosing your bank is a significant decision, and one which we usually determine very early in our financial lives. Many people I talk to are still with their first bank, the one they walked into with their parents to open their first account. While I am all for loyalty, it doesn’t make sense to stick with your bank just because you’ve been with it for years. That’s like saying ‘I’m still going to wear my 1980’s neon camouflage pants because I’ve been wearing them for years.’
I would wager that you are certainly much different than you were when you opened your first savings account, and your choice of a bank should reflect who you are currently, not who you were then or who your parents are.
Switching banks may be a great fiscal decision, especially when you know what you’re looking for.
My introduction to banking was a savings account with Bank of America, it also gave me my first piece of plastic, an ATM card. My parents opened it for me when I was 12 so I could deposit my first paper route paycheck. I thought it was so cool that I could go to an ATM, insert my card and get money, and so did my friends. I kept that account until I was 24, and I’ve talked to several people who have had a similar story.
There is something about big banks, Bank of America, Chase, Wells Fargo, U.S. Bank that makes us feel safe. They have an extensive network of branches and ATM’s, we see their ads on TV, they are a known commodity. Many people trust them with their money for these reasons. Yet what we’ve seen in recent history with companies like Fannie Mae is that even the big boys can go under. While these large traditional banks have some advantages, they also have some striking disadvantages.
Here are some of the advantages of traditional banks:
Here are the disadvantages of traditional banks:
Our bank of choice is the credit union and this is where we bank. When Krista and I joined our accounts together we went with a credit union mainly because they don’t exist to make a profit. A credit union is a member owned financial cooperative, controlled by its members for the purpose of providing affordable financial services. If you want a more thorough explanation here is an article from the world council of credit unions. Also if you are looking for a credit union in your area here is a helpful search tool where you can find one close to home. We have been with ours for two years and we definitely won’t be switching. It is refreshing dealing with an organization that isn’t after your money and doesn’t charge you any fees.
Here are some of the advantages of credit unions:
Here are the disadvantages of Credit Unions:
A new phenomenon in banking today is the online bank. Some of these include Ally, ING Direct, and PerkStreet. These banks exist solely in the online world, and are really designed for people who don’t need to have any physical connection with their bank.
Here are the advantages of online banks:
The disadvantages of online banks:
Ultimately the choice is up to you. Hopefully this post provided a little more insight into what you’re getting with different types of banks, but it’s really a matter of assessing your needs and finding the bank that fits them. Not settling just for what you know.
Tell us about your bank, what do you like about it? What has kept you there or prevented you from switching?