How the Bank You Choose Affects Your Financial Future

When you opened your first savings or checking account, it was probably at the same bank your parents or grandparents had accounts with. As you grew older, you probably chose to do business with a bank that was in your area or that was easy to access online. However, you might not be aware that your choice of financial institution could have a significant impact on your finances. This article will look at different ways your financial future is impacted by the bank you choose.

 

Bank or Credit Union?

 

Although there are a number of similarities between banks and credit unions, there are a few key differences to be aware of as well. For example, credit unions may not offer as many financial products to their members, and they also tend to have stricter lending criteria compared to major banks. Therefore, it may be harder to get a vehicle loan, student loan or credit card that allows you to spend what you need to meet your goals.

 

Is There a Wealth Management Department?

 

One of the reasons why you put your money in the bank is to both preserve and grow your wealth. Ideally, there will be a financial adviser on staff who will work with you to ensure that you can maximize savings or meet other financial goals. At a minimum, there should be someone available who can answer basic questions about the services offered. This will hopefully prevent you from incurring penalties or otherwise experiencing unexpected consequences when moving or taking out your money.

 

Is Your Bank Large Enough to Survive?

 

Your money is protected up to $250,000 per account through the FDIC. However, this may be of little solace if your bank collapses or is otherwise unable to maintain adequate capital reserves. In either scenario, it may be days or weeks before you can access your money, which can make it difficult to pay bills or take care of other obligations. Ultimately, you might suffer a lower credit score or otherwise find it harder to meet your financial goals without proper liquidity at the bank.

 

Will Your Cards Be Accepted Everywhere?

 

Larger banks typically offer debit and credit cards that are accepted almost everywhere. This means that you don’t have to carry cash or even spend your own money to travel, eat dinner, or go to a sporting event. The ability to use a debit or credit card is critical because it can provide extra levels of protection compared to using cash. If your bank doesn’t offer the right type of cards, you might find yourself stranded overseas or in other situations that you might need to spend extra money to get yourself out of.

 

Although you can bank wherever you want, your choice of bank can be just as important as your own financial habits. If you don’t have the right people backing you, it can be tough to buy a house, start a business, or take other steps to grow your wealth. It can also be difficult to trust that your money is safe if your bank is unstable or otherwise has a shaky future.