- Personal Finance»
- Banks, S&L's, Credit Unions
Choosing the right bank
Minimum balance requirement
Banks require their customer to keep a minimum cash balance in their accounts. Minimum balance requirement differs from bank to bank and a fixed amount is deducted by bank as penalty for not keeping the prescribed minimum balance in the account. There are also banks who offers there costumer zero balance accounts which means there is no requirement for keeping a minimum balance in the account. So while selecting the bank choose the bank who has the lowest or nil minimum balance requirement as that amount which is kept as minimum balance gets blocked that means it can't be used for any other purpose, if you withdraw that amount you will be penalised by bank by deducting a fixed sum from your account.
Number of free transactions offered
Generally banks sets the limit for the number of debit or credit transactions which can be done by its customer during the month. If a transaction is done beyond the set limit the bank deducted predetermined charged for each transaction carried out beyond the prescribed limit. The limit is set for saving accounts only as the nature of other accounts are such that there will be numerous transactions in that accounts and which cannot be restricted. So choose the bank which offers greater number to transactions which can be made during the month.
After each financial year the bank deduct a fixed charge from all the operational accounts for various add-on services provided by it. These charges comprises of charges for providing ATM service, sms service, letter of guarantee given on behalf of its account holder and other services provided by the bank as per the instructions received from its customer. Here also charges differ from bank to bank and when all such charges are taken together it becomes a huge amount.
Internet banking facility
Bank with internet banking facilities helps in doing business easily as major banking operations can be performed from anywhere through the network normally the internet. Nowadays many banks provide the facility of online loan appraisal, making of request of new cheque book or fixed deposit receipts, transfer of amount to any other account in real time and contacting directly to the manager through video conferencing.
Credit facilities can be easily availed from the bank in which you hold your account. Credit facilities include any type of loan or credit card facility. Here watch out for the interest charged by the bank on credit facilities and whether they offer prepayment of credit amount or not. The duration for which such credit facility can be availed, time taken to sanction such credit facility and the guarantees to be given for such credit facility should also be considered. Many banks offer interest free short term credit facility which can be of great help in times of financial crises.
A bank which together with its partners offers wide coverage of its ATM facilities should be preferred as, if you can't find your banks ATM at the desired place and opts for another bank ATM to withdraw cash, your bank will deducted certain amount from your account as a charge for providing you with cash withdrawal facility through another banks ATM. Also if your bank have numerous ATM installed at various locations you will be at ease as you can perform basic banking operations through ATM.
Interest rates varies from bank to bank so if you are planning to keep sufficient funds in your account go for the bank which offers higher interest on the fund's kept in the account. Generally interest is given on funds kept in savings account or time deposits account, whereas bank charges interest on cash credit or overdraft accounts. Also check the compounding factor for interest. For example you total interest earned during the year will be higher in banks which credit interests to your account quarterly as compared to banks which credit interest to your account half yearly, as you will be earning more interest on interest among credited in first case.
Facilities provided during cash deposit or withdrawal
If you are a premium customer of your bank you may avoid that long queue on the cash deposit counter and can directly approach to the customer for cash deposit or withdrawal. Banks with cash deposit and withdrawal machines can also be helpful to quickly perform once operations and save time.
Automated transaction facility
On the standing instructions by its account holder the bank's process various periodic payments on behalf of its customer. For example if it's customer requires the bank will pay it's monthly electricity or telephone bill by making suitable adjustments to his account. Banks also perform functions such as collection of its customers bill and discounting them without engaging his customer in any of its tasks. It recovers the dues from its customer debtors while charging a small amount and takes responsibilities for bad debts.
Banks customer representative's represent how much the bank is concerned for its account holders. A good customer representative will sort his customer's problem as soon as possible and it also guide its customer to gain the maximum benefit from the baking policies.
Number of branches
A bank whose branches are located in far and remote locations are generally preferred by account holders in the capacity of business owner who is having its premises at various locations can transact with a single bank through central banking solutions. Also receiving payments from its debtors or making payments to its creditors is simplified as they can easily be transacted through the banks as the cost becomes high when inter banking operations are carried out.
Additional facilities to senior citizen
Some banks takes additional care for its senior account holders. They provide them with more benefits such as if a senior citizen wants to withdraw or deposit cash in its account the senior account holder will just have to call bank and communicate his desire, then the bank representative will himself come to the account holders home and provide him with facilities he desires.
Mobile banking facility
Nowadays the use of mobile banking has geared up and the need to visit banks personally for banking operations is not necessary. You can easily download the mobile application of the bank or can call or send a message to get your work done. So while choosing the bank check out the extent of services offered by back through its mobile banking facility.
Some of the banks offer free insurance for its account holders while other charges a minimal amount for such insurance. An account holder should check out the type of insurance offered, premium payments, the claim processes and the periodic payments if any.
Which factor yout consider as most important while choosing between banks?
All banks have their own work hours. Banks with longer work hours facilitates its customers to perform their banking operations with ease by scheduling it with other work to be done. An account holder working as an employee in any organisation can do its banking activities after his office hours if the bank remains open for longer durations otherwise normally bank hours clashes with office hours and if you have any bank related work you will have to take leave from the office.