Service, safety key issues when picking banks

a pen and a check
  • Know your needs before you start comparing banks.
  • Credit unions and community banks might be an option.
  • Online-only banks are on the rise.

Comparing banks to find a financial home

Between the list of bank failures in 2010 and drops in customer satisfaction at some of the nation's biggest banks, many consumers are searching for a new financial home. From community banking institutions and credit unions to direct online banks, you can compare alternatives to financial giants to find a great fit for your spending and saving style.

Rates to celebrate

Whether you are looking to open a savings account or get a new credit card, community banks and credit unions typically offer very friendly rates for consumers. Customers are taking note, too. A 2009 survey of the Independent Community Bankers of America shows that more than half of community banks saw an increase in deposits from new customers. Be sure to research interest rates and how each bank compounds interest to understand how you can grow your money.

Account education

As you compare banks, be sure to get an in-depth tutorial of the fees that may be imposed on your account. If you are a frequent traveler who needs regular access to cash at an ATM, an institution with a large network of ATMs or a bank that reimburses ATM fees will ensure you don't rack up hefty penalties for withdrawing your money.

Online banks

As the financial industry has been forced to restructure some of the ways retail banking works, direct online banks have emerged as a popular choice for many consumers. Online banks such as Ally and ING Direct offer account options with high interest rates and no account minimums. Before you choose to open an online bank account, it's important to fully understand the differences of online-only banking.

It's no secret that many financial institutions have struggled amidst the troubled economy. Before you open a new checking or savings account anywhere, knowing the bank’s financial stability is key. Use Bankrate's Safe & Sound rating system to discover how banks are performing based on four key factors: capital adequacy, asset quality, profitability and liquidity.

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