Choosing the Right Bank

Some of the links in this article are "affiliate links", a link with a special tracking code. This means if you click on an affiliate link and purchase the item, we will receive an affiliate commission.

The price of the item is the same whether it is an affiliate link or not. Regardless, we only recommend products or services we believe will add value to our readers.

By using the affiliate links, you are helping support our Website, and we genuinely appreciate your support.

In recent years, banks have become an essential part of people’s finances. Whether you want to admit it or not, having a bank is crucial regardless of what your goal is—from simply receiving your paycheck and setting up a savings account to creating a solid retirement plan for the future. So the question imposes itself—how do you choose the right bank that will assist you in achieving these plans?

Just the Nuggets

  • Banks are financial institutions essential for providing all sorts of services—from loans and deposits to cash and wealth management and foreign currency exchange.
  • Several types of banks have established themselves, such as central, commercial, retail, and investment banks.
  • All the banks’ operations and business structures are managed by the laws and regulations of a certain country and its monetary system.
  • Things to consider when choosing the right bank range from accessibility and safety to interest rates and balance requirements.

The Importance of Banks

Banks have become the number one financial institutions when it comes to managing your money. Whether you wish to invest in your future by creating a lasting financial plan or to enter the world of trading and acquire more profits, banks are necessary intermediates that make these processes simpler for you. 

They take on a lot of the extra load behind the scenes so you can manage your funds without a hitch. In their core, banks are financial institutions licensed to receive deposits and give out loans. However, in reality, they are so much more than that. They provide assistance in the area of wealth management, currency exchange, and other essential factors contributing to your finances.

One of the most important parts of each country’s legal system is the bank regulation. Typically, banks are regulated by the national government or other key institution in the area of finance in a country. For example, banks in the US are not regulated by the Congress—rather, their operations are dictated and managed by the Federal Reserve, which serves as the central bank in the US. The Fed releases policies, guidelines, and other necessary documentation that contribute to the regulatory frame of the banking management and business.

It is important to note that banks are equally beneficial for individuals and companies. They provide the necessary balance in the financial world and make sure that these operations run smoothly. The money that is put into banks, regardless of the amount, is insured by the central bank or other government institution in the area. 

Here are some of the most important areas of your financial life that the banks provide with solutions and security.


The best-known role of banks is to set up savings accounts upon their clients’ request. Each client has unique goals and wishes when it comes to their financial stability, not to mention the income, expenses, and so many other factors contributing to their financial situation. Based on all of these, banks serve as a helpful guide to create a suitable financial plan when it comes to savings. Aside from that, the savings accounts allow the clients to earn interest on their investments. This way, simply by putting your funds into a savings account, you can patiently watch as that amount grows over time.

Loans and Credit

The second but equally important role of banks is to provide loans and credit opportunities to individuals and companies. There are many factors coming into play here as well—from the amount of monthly (or yearly) income to the expenses and goals of the corporations who plan to use the money for the company’s advancement. These loans can come in many other forms, too—from credit cards and mortgages to car payments and leases.

Further Reading:
6 Tips to Legally Break Your Lease During COVID-19 by Small Business Attorney NYC


One of the banks’ crucial roles is providing liquidity for the country’s financial system. By acquiring and piling the money from individuals and institutions, banks create a necessary safety net for each country and its monetary system. After all, this is the base of each economy and its functionality, which is why it is important for the banks to always be managed and to follow the guidelines and regulatory frames each country’s legal system imposes.

The Scrutiny

Since the announcement of the global financial crisis of 2008, banks across the globe have experienced severe scrutiny from all around the world for not doing their job properly. As a result, the regulatory frame for banking operations have grown significantly stricter, and the roles of banks have become more controlled. Since then, banks are regulated by many more institutions on different levels of the state organization—from the federal units and municipalities to agencies and other key players in the world of financial regulation.

Types of Banks

As the clients’ needs change and become more specific, the banking system also becomes more diverse and beneficial for them. The main distinction that can be created is between the central banks, which are concerned with managing and regulating the operations of other banks in a country, and the commercial banks, which are concerned with the business of the clients and companies. 

However, there are a few more bank types you should know.

1. Retail Banks

These banks provide services to the general public, including the setup of checking and savings accounts, loans and mortgages, short-term loans, and overdraft protection. Retail banks address the simple yet necessary operations helping the individual clients to manage their finances in the long run. Bigger and more established retail banks also provide more advanced services such as credit cards and wealth management.

2. Corporate Banks

These banks specialize in providing financial services to their business clients, particularly small businesses and larger entities such as global corporations. These services include day-to-day banking services, credit and real estate services, and trade financing.

3. Investment Banks

Investment banks are concerned with providing more advanced and complex financial services to their clients, including underwriting and assisting with merger and acquisition. Their clients are usually big corporations but they also cater to governments, hedge funds, and other key financial institutions.

4. Central Banks

Unlike the previous bank types, central banks do not deal directly with clients. Rather, they provide regulatory frames and policies that help create a solid structure and guidelines for all the other types of banks. They are also crucial for providing currency stability, creating monetary policies, and ensuring the country’s financial liquidity.

Single or Multiple Banks?

The majority of experts in the area of finance and investing advise their clients to open two of the most important bank accounts—checking and savings. While checking accounts are used for monthly expenses and purchases, savings accounts provide a significant amount of funds over time, especially with interest. However, is it wise to keep all your accounts with a single bank, or should you open them with several banks?

While it is common knowledge that you should pile up the money in one place for safety, things seem to have changed since the global financial crisis of 2008. Since then, the contradictory opinions have started to emerge on this topic. 

Now, the experts are advising to do your research and open your bank accounts with different bank institutions depending on their nature. If you wish to open a foreign currency account—for example—you would be advised to do so with a well-established name in this industry, rather than the one closest to you. Similarly, the savings account should be opened with a bank offering the best interest rates. Either way, you should decide on this based on your own goals and wishes when it comes to your finances.

Things to Consider When Choosing a Bank

The very first thing you need to do in order to choose the most suitable bank as your financial guide is to get to know yourself. What do you want to achieve when it comes to your funds? Are you planning to save until next summer when you plan to go on a lavish vacation? Are you rather looking to set up a long-term retirement plan? 

Either way, these are the things to consider on your road of choosing a bank. 

1. Accessibility

Access to one’s funds at all times is crucial when deciding to be a client. Most people today look for a bank having as many ATMs across town as possible, not to mention, the ability to pay and withdraw their money even when they’re abroad. Lately, the clients find it more important than ever that their bank provides a safe and efficient online banking environment. Does your bank provide a mobile app for finance maintenance? Make sure to find out about that before deciding.

2. Fees

There are so many factors to take into consideration when it comes to fees. From the account type to the fund amount, each bank has a different policy for this area. Nevertheless, there are a few fee types attached to your account, regardless of the bank you end up choosing.

  • Monthly maintenance fee

As the term would imply, these are the standard fees for your account maintenance and other actions from your bank regarding keeping your funds fluid.

  • Overdraft protection fee

This type of fee serves as a notification when your account is close to being overdrawn. Although the majority of banks allow a certain amount in overdrafts, they still charge those with a fee.

  • ATM fees

These fees are applied every time you withdraw money from your account through an ATM. Luckily, most banks only require a small fee when you use an ATM which is not maintained by your bank.

  • Insufficient funds fee

When you make a payment or withdrawal despite not having enough funds on your account, you’ll be charged with this fee. 

3. Balance

Different banks require different things when it comes to account balances. Though each type of account draws different ones, there are a few balance requirements applied to all account types:

  • Average monthly balance

This requirement implies that the amount of funds in your account cannot fall below a certain limit.

  • Minimum balance

This requirement is similar to the previous one, but it also refers to some benefits such as better interest rates.

  • Minimum savings amount

Some banks require you to keep a certain amount of funds in savings to avoid account termination.

4. Interest Rates

Interest rates are the factors touching almost every part of your account and funds, no matter the type or amount. For example, when you have a savings account, the interest rates contribute to the rise in those funds over time, depending on the bank’s policy. Similarly, when you request a loan from the bank, depending on the loan type and a number of other factors, you’ll be charged a certain amount of interest.

5. Bank Security

The last but the most important feature to look for in a bank is the highest possible level of safety and security, not only for your funds but also for your personal information. This area is only getting a larger spotlight in the past couple of years, thanks to the significant growth in identity theft, money laundering, and other harmful activities that contribute to the rise of cybercrime and cyber-terrorism.

How to Open a Bank Account

After choosing the right bank, you need to decide on the type of bank account you want to open. Checking or savings? Loan or credit? These are the steps to opening a bank account.

1. Choose the banking type

Most of the clients today need to have access to their bank accounts, no matter where they are or what time it is. Regardless of your bank’s working hours or the time zone you are in, the online banking feature allows access to your funds in just a few seconds. 

2. Provide documentation

Each bank requires you to provide certain documentation to prove your identity and ensure the safety of your funds. Also, they need confirmation that you are at least 18 years old, which is the basic requirement to open any bank account on your own.

3. Make a minimum deposit

Most banks today require you to make a minimum deposit before opening your account. In addition, you should also be able to meet a certain balance each month. In case you don’t, you will be charged a fee on your account.

4. Secure your information

After creating your bank account, you will be given a unique PIN code that you will use upon making withdrawals on the ATM and online purchases. This code is another layer of safety for your funds and information, so keep it close and hidden!

Closing Notes

Choosing the right bank is imperative for clients and corporations across the globe. Depending on your personal financial goals and desires, today you have many options to choose from when it comes to setting up a bank account with a safe and reliable financial institution in your country. Also, banks have quite an important role in keeping the financial system liquid and stable over longer periods of time, especially during times of crises.

Our References and Further Readings

Leave a Reply

Your email address will not be published.