4 Things You Should Look for in a Bank Besides a High Interest Rate

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KEY POINTS

  • If you have money to put in the bank, it's natural to want a higher interest rate on it.
  • But that's not the only thing to incorporate into your decision.

There's more than one factor to focus on when finding a home for your money.

For years, banks were notoriously stingy on the interest rate front. But that's changed a lot this year.

The Federal Reserve's recent interest rate hikes have been a mixed bag for consumers. On the one hand, they've led to higher borrowing rates across products like auto loans, HELOCs, and personal loans. On the other hand, they've led to higher interest rates in savings accounts as well as certificates of deposit (CDs).

If you're looking for a new bank (or for your first bank account), you may be eager to find one that pays the most interest. And to be clear, it's a good idea to compare savings account and CD rates and see what interest you're able to snag.

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But that's not the only factor you should consider. Here are some other key features to look for in a bank.

1. Reasonable fees

It's common for banks to charge an account maintenance fee that can sometimes be waived if you maintain a certain minimum balance. It's a good idea to find a bank that keeps this fee relatively low or makes it easy to get out of (such as imposing a reasonable balance to have it waived). The less you pay in fees, the more of your money you get to keep.

2. Great customer service

Whether you decide to do your banking at an online-only bank or at a physical one, it's important to have access to great customer service. That doesn't just mean friendly staff members -- it means knowledgeable people who can help you navigate issues and address any questions or concerns you might have. Steer clear of any bank that doesn't give you confidence in its customer service team -- even if that bank is offering up a generous interest rate on savings.

3. A convenient location

If you're opening an account at a physical bank, make sure the location is truly convenient for you. If the bank in question is right near your office but nowhere close to your apartment, and you work from home most of the time, it may not be the best fit. You might also consider favoring a bank with multiple branches in your area, as opposed to just one or two that are very spread out.

4. Accessible ATMs

We're not yet at the point of being a cashless society. And so you might have different reasons for needing access to cold, hard cash. It's important to find a bank with a solid network of ATMs. This is an especially important point to research if you'll be opening an account at an online bank (that bank might still have a network of ATMs in different locations, such as convenience stores, but it may be limited).

It's natural to want to chase the highest interest rate possible on the money you put into the bank. But don't neglect these other factors when making your decision. Interest rates can fluctuate over time, and there's the potential for them to drop down to minimal levels once more. So it's important to find a bank that serves your needs in multiple ways -- not just from an interest rate perspective.

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Rates as of Apr 15, 2024 Ratings Methodology
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