Man on his smartphone standing by an ATM
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Having to make tough decisions is one of the worst things about adulting.

You have to decide where to work, who to marry and where to bank.

Picking a bank isn’t as stressful as picking a mate, but it’s not easy. Parking your cash in the wrong place can cost you.

Here are seven tips millennials should consider before choosing a bank.

Focus on the numbers

Don’t like wasting money? Find a bank that doesn’t levy unnecessary charges.

“Why would you pay $100 a year for checking, savings and basic banking if you can pay $30 or $5 or nothing?” says Douglas Boneparth, CFP, president of Bone Fide Wealth, a New York City-based financial advisor firm.

Since online banks have few branches, they have fewer operating costs. That’s why they usually don’t charge as many fees as brick-and-mortar banks.

Online banks tend to have better rates for savers, too. Compare today’s best money market account rates.

Pay attention to overdraft fees

Millennials should consider the cost of overdrawing a checking account. Among the 50 biggest banks, the average overdraft fee is $34, according to the Consumer Financial Protection Bureau.

Many banks offer overdraft protection programs. When there aren’t enough funds in an account to cover a purchase, a bank can pay for it.

But overdraft protection can be expensive. The CFPB found that those who opt in pay about seven times more in fees than those who don’t.

When you’re shopping for a new bank, find one that has more lenient overdraft policies.

And when you find your perfect account, do this:

  • Link your checking account to another account at your financial institution so that if you run out of money in your checking account, the bank will pull money from the other account to cover the transaction. You may be charged a fee for this, but it’s typically less than an overdraft fee.
  • Sign up for low-balance alerts through your bank or credit union’s website. These alerts, which you may be able to receive on your smartphone, will alert you when you are at risk of overdrawing.

Think about accessibility

When it comes to banking, another key factor for millennials is accessibility. Young adults, it turns out, don’t just want to bank online.

J.D. Power’s 2017 Retail Banking Satisfaction Study reveals that among millennials, the happiest bank customers have access to both digital and in-branch services.

Younger millennials, in particular, may feel the need to visit banks because they’re seeking to learn more about the basics of banking.

Even among the older set in Generation Y, branch banking remains important, though, with more than 60 percent saying they’ve visited a bank branch within the past year, according to Javelin Strategy & Research.

What people do at the bank branch
Transaction during last visit Younger than 40 40+
Make a deposit 61% 58%
Withdraw cash 40% 35%
Cash a check 32% 21%
Apply for a new account/product 14% 4%
Get account information 19% 8%
Make account changes 15% 5%
Ask a question 13% 8%
Discuss a problem or complaint 6% 3%
Other (transfer funds, stop payment, etc.) 6% 9%

Source: J.D. Power 2017 Retail Banking Satisfaction Study

Nearly a quarter of survey respondents under 40 said they opened their most recent bank account online. But a whopping 73 percent said they opened their account in person.

The takeaway? Even if you plan to do almost everything online, you might want a bank with some physical branches.

Don’t rule out credit unions

Millennials are familiar with the biggest banks. But you’ll want to shop around and consider credit unions, too.

Finding out what local credit unions offer may take time. However, doing some research could pay off.

“Credit unions are an ideal financial solution for millennials,” says Brad Calhoun, chief marketing and retail officer for First Tech Federal Credit Union. “Credit unions return value to members through lower fees and loan rates since we don’t answer to investors.”

Find a bank that fits your lifestyle

The bank you choose should meet your needs. If you’re entrepreneurial, you’ll need a bank that can provide support as you build a business.

If you’re trying to meet savings goals, Ben Brown, founder and CEO of a fee-only investment advisory firm called Entelechy, recommends looking for a bank that lets you open and name separate accounts.

“What I typically do is have clients open their main checking account, which acts as sort of a clearinghouse and then multiple savings accounts for different goals,” Brown says. “You might have a travel fund, a gift fund and a regular expense fund, just to make budgeting much easier.”

Examine digital features

Not all banks have the same digital capabilities. Some online banks, for example, don’t offer a smartphone app.

For millennials, that could be a problem.

“Millennials demand convenience, and we’re constantly moving toward a more integrated world,” says Regan Smith, a wealth advisor with Vista Wealth Management, a firm headquartered in Palo Alto, California. “If a bank isn’t tech-forward, millennials will eventually move to one that is.”

Reading reviews online can show what customers think about their banking apps.

You’ll also need to find out whether a bank or credit union offers the digital features you want, such as text alerts and mobile check deposit.

Understand terms and conditions

You shouldn’t open a bank account without knowing what’s in the fine print.

If there are monthly service fees, ask whether you can waive them. If there are out-of-network ATM charges, find out whether the bank offers refunds.

Make sure your savings will be federally insured by the National Credit Union Administration or the Federal Deposit Insurance Corp (just in case your bank closes).

Finally, as you’re comparing CD rates and other products, watch out for promotional deals that expire.

“Teaser rates or things like that — these are things that typically look good in the short-term,” Boneparth says. “But over the long-term, it ends up costing you money.”

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