When it comes to banking, and choosing a bank, trust is key. Unfortunately, the collapse of different banking institutions over the years and the massive fluctuations in interest rates since the pandemic has led to an increase in the distrust people have for banks. Although banks are making efforts to increase trust with their customers, many people still aren’t sure which bank they should choose, or which is the best. To help you make your decision, here is a breakdown of what you should be looking for in a bank to help you answer the question, what makes a bank, the best bank?

Types of Banks

Before you can choose a bank, you need to first decide what type of bank is right for you. There are more than three types of banks, each of them with different advantages and disadvantages.

• Traditional Banks: This is what most people will think of when they hear the word bank. This is a standard bank, made from bricks and mortar, with ATM machines and some online services. The advantages of a traditional bank is that you can speak to someone in person, either in the branch or on the phone. Unfortunately, in comparison to its competitors, traditional banks do have higher fees.
• Online Banks: the popularity of online banks have increased massively over the last few years. With no physical branches (or fewer branches), these banks have much lower overheads, allowing them to be more competitive with their prices. Although you won’t be able to walk into the branch to talk to someone, they do have exceptional customer support options, enabling you to access support whenever you need it.
• Credit unions: these not-for-profit financial cooperatives are owned by members who receive profits via lower fees and higher interest rates, unlike traditional banks which are publicly owned, beholden to shareholders, and must meet revenue goals. Credit unions develop genuine relationships with the community by giving back to it. However, they have strict rules when it comes to accessing services and they may not offer certain features, like online banking.

Fees, Charges, and Interest rates

One of the factors that might influence where you bank is the fees, charges, and interest rates that are applied to your account. There are two main types of accounts, a checking account and a savings account. Most people will choose to have these accounts with different banks because of the fees and interest rates that apply.

• Banking fees: most banks charge a monthly fee to maintain checking accounts and these fees can vary greatly between different banks. As well as monthly fees, they might also charge the following fees.
  • Monthly maintenance fees
  • Overdraft fees
  • Statement fees
  • Returned check fees
  • Cashier’s check fees
  • Certified check fees
  • Wire transfer fees
  • Stop payment fees
  • Out-of-network ATM fees
• Interest rates: banks will pay you interest on savings you have in your account, equally they will charge you interest for loaning money through services such as overdrafts. When you look for a savings account, you’ll want to look for the highest interest rates possible. Whereas if you’re looking for a lending facility, you’ll want the lowest interest rates you can find.

Features

As well as the fees and interest you’ll be charged, and the interest you’ll receive on savings, another factor on your bank choice will be the features they have available to you.  Banks offer a range of different services, features and discounts, including the following.

• Online and app features: if you prefer to manage your money online, or through an app, rather than in a branch office, you should try to find a bank that provides good online services and/or has an app available for you to download and use.
• ATMs and branches: some people want to have a branch local to them, so they can visit it and speak to someone face-to-face if they have any problems. Equally, most people will want to know there are local ATM’s they can use to withdraw their cash.
• Security: different banks have different security measures to help protect their customers from fraud and stop fraudsters accessing their customers accounts. To check this, you can see what security measures the banks state they have in place and also check the news to see if there have been any security breaches.

Reputation

The bank’s reputation and financial stability is a very important factor. The best way to check this is to look online to find information on their track record. Look at customer reviews, financial statements, and ratings from reputable agencies. Also consider the bank’s market presence, profitability, whether its meeting financial obligations and its capital adequacy ratios.

The Age of the Bank

One of the things you might look at when deciding what bank is best for you, is which are the oldest banks around the world. The older a bank is, the more trust it is likely to inspire in new customers. This link will show you the oldest banks from around the world, and which banks have continued to thrive over the years and through many financial crises.