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Monday, March 16, 2015

7 tips for choosing the best bank account for you

The banking landscape can be one that is incredibly confusing; from the range of financial institutions, which includes banks, building societies and co-ops, to there being seemingly tens of differing bank account types, all of which can result in consumers choosing a bank account that isn’t fit for their needs. In this guide we take a look at how you can make sense of the range of bank accounts, and moreover, how you can ensure that you choose the account right for your financial needs.
personal banking
Banking is an individual choice with many options

Consider your circumstances… and your history

First and foremost you need to consider your creditworthiness. For average credit records with no significant marks on them, bank accounts of any variety, from any provider, will be suitable. However, if your credit history is chequered then you may need to choose a banking product specifically created for consumers with previous credit problems. These are generally known as Basic Bank Accounts, and feature just an ATM card with no credit facilities such as an overdraft.

2. Compare perks

As banks have become increasingly competitive many have sought to differentiate themselves through bank account perks. Some may give you a small amount of money each month, others may offer savings accounts with industry beating interest rates; so carefully consider what may be of most use to you.

3. Compare charges and interest rates

Each bank account will have a differing set of interest rates and charges. Compare each account’s debit and credit interest rates, as well as the charges associated with common services, such as unauthorised overdrafts and bounced cheques and payments.

4. Visit the Smart Money People website

Once you’ve whittled down the list of potential bank accounts and providers, you need to seek the opinions of others. Of course, you can ask friends and family, but far more effective and convenient is taking a visit to the Smart Money People, a website that is dedicated to bringing reviews direct from consumer’s own personal experiences.

5. Consider how you bank

Many people bank mostly online nowadays, particularly as you can do everything from sending payments to friends to applying for accounts. However, there remains many who still rely upon their local branch, and if this applies to you you’ll need to consider the location of the nearest branch. Here are some tips on how to bank.

6. Think about whether monthly charge accounts are relevant

Bank accounts have taken a decided step towards pay monthly additional services (these may include breakdown coverage, holiday insurance and preferential currency conversion rates). For those who would use each of the services within the account package the savings can be considerable, however you should think carefully about whether you’ll really use them and be able justify the ongoing monthly payment.

7. Visit your nearest branch

Once you’ve chosen the right bank account it’s time to visit the provider. At this point you should be aware of the friendliness of staff, as well as their attentiveness. If you're happy to proceed, and if you’re switching from an existing provider to another, you should then expect the process to take no longer than seven days, as is dictated by governmental guidelines.

Image: 401(k) 2012, CC BY-SA 2.0