How people really pick a bank

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Did you research your bank’s interest rates, fees, services, safety and soundness before you opened your account? Or did you choose your bank because there was a branch near your home or office or you responded to a promotion?

Research is recommended and for good reason as David McMillin reports in “Service, safety key issues when picking banks” on Given the risk of bank failures and rise in consumer dissatisfaction, he writes, it behooves consumers who are in the market for a new bank to do their homework.

But my own suspicion is that few people have the time, patience or inclination to do this sort of thorough due diligence into countless banking options that include not just major banks, but also regional banks, credit unions, online banks and other types of financial institutions that offer banking services. Sure, some people do quite a bit of research, but I imagine they are in the minority. (And banks surely know that since they make such a hash of their marketing and disclosures.)

It’s easy to conclude that consumers who don’t do proper research before they choose a bank are apathetic, lazy, stupid, gullible or whatever.

But perhaps banking customers are really much smarter than that.

Perhaps they don’t do much research because they’ve already figured out that the differences between banks just aren’t meaningful enough to matter to their daily lives. One bank may offer a fractionally higher interest rate or a slightly lower fee on one infrequently used service or another, but those small differences don’t justify the time they’d have to spend to find out that information at such a detailed level.

Perhaps most people do a little research, but not a lot of research. They find out just enough to assure themselves that their deposits will be FDIC-insured and that the bank’s fees and policies appear to be fairly standard stuff.

So, how did you choose your bank? Did you do all the research? Did you make a snap decision? Or did you find out just the few facts you needed to know?