Choosing the right banking partner can help you achieve financial independence by providing the products and services you need to help you to meet your financial goals.
Here are 7 factors to consider:
1. Account types
Do they offer the type of account, or accounts, you need? For example, you might be looking for an everyday bank account to manage your day to day income and spending. Or perhaps you are looking for a regular savings account so that you can keep your savings separate from your everyday spending.
2. Basic or advanced
Do they provide the account features you are looking for? For example, you might simply want a basic bank account to deposit your income, make payments, and withdraw cash from ATMs. Or perhaps one that comes packaged with a range of added benefits, (e.g. breakdown cover or travel insurance) which may charge a monthly fee?
If you have savings, an ordinary savings account, that provides instant access to your money, might be ideal. Or perhaps you are looking for one that pays a higher rate of interest in return for a longer notice period.
3. Digital banking
What is their digital banking experience like? These days, digital banking enables you to do most of your everyday banking without needing either to visit a branch, or even to pick up the phone. For example, many banking providers offer mobile apps for their accounts, with which you can:
Note that some banks offer an online and mobile banking services in addition to a network of branches, while others are 100% digital, online only, and have no physical branches at all.
4. Services offered
Do they provide the specific services you know you will need, like using cheques, sending payments overseas or setting up automated payments? Depending on your situation, there may be specific features you are looking for, such as a fee-free overdraft, if you are a student.
5. Interest rates and fees
Depending on your situation, the rate of interest offered on your savings, or charged on your overdraft, will be key to your choice of account and banking provider. As a student, you might prefer to opt for an account with an overdraft with low (or no) fees, or a savings account that offers instant access. Once you are working, you may be happy to pay a monthly fee in return for additional services that would benefit you.
6. Values
Increasingly, people are choosing to trust their finances with providers who share their personal values. For example, you may prefer to bank with a provider that has strong ethical credentials, committed to reducing its carbon footprint. Or one that invests in specific environmental causes, like renewable energy companies or community projects.
You may wish to take time to research your banking partner's impact on the planet, and choose one that funds initiatives with a positive impact on society.
7. Competition and choice
When choosing a bank, there is plenty of choice available, with strong competition between providers. These days, it's perfectly normal to use multiple providers for bank accounts, savings accounts, credit cards and loans. You should review your banking needs regularly and shop around for the options that best suit your needs.
Choosing the right banking partner is a personal decision, and everyone's situation is different. Initially, you may simply be looking for a convenient and secure place to manage your income or salary. However, you should also consider any features that might help you manage your finances more effectively, as well as other services you might need in the future, such as a mortgage, insurance, savings and investments. It's about deciding the features and benefits that mean the most to you.
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