Contrary to popular belief, the millennials generation is particularly savvy about their banking and savings needs. Millennials have slightly different banking habits than previous generations, especially when it comes to fees, technology, and convenience. They are also willing to jump around and look into different banking options that are more beneficial to their finances and lifestyles. For example, Gallup Analytics recently carried out a poll that found that millennials are much more likely than Gen Xers and Baby Boomers to change banks if they’re dissatisfied.
If you’re a millennial reading this, you’ll know that putting your hard-earned cash in a bank account that charges fees for almost everything can wreak havoc on your financial future. Taking the time to choose the right bank can be highly beneficial for your bottom line in the long run. For example, having a range of services at your fingertips, such as automated savings, can help to set savings goals and a good rate of interest on positive balances as well as convenient online or app-based access. Being aware of what to look out for when choosing a new bank as a millennial can mean time-consuming research, but luckily, we’ve done all that for you and have narrowed it down to just five top considerations!
Convenience is a major consideration for millennials, as they want to be able to bank on the go and with ease. Smartphones, tablets, and other devices are a part of daily life, and it’s hard to remember a time before them! Driving to the bank or going with public transport, standing in a queue, speaking face to face with a teller who may tell you that you’ve filled in your form incorrectly, going back to re-do the form, standing in the queue again, waiting for your transaction to be processed… exhausting! And it’s no longer necessary with the banking technology available these days.
This is a huge one for millennials to take note of! Does the bank you’re considering have a fair schedule of charges? Will they charge you to use your card at ATMs owned by other banks? Do you need to maintain a minimum balance to avoid fees? For example, Wells Fargo checking account fees can be relatively high depending on how you use your account, and the big banks are known for being somewhat predatory with their numerous “hidden” fees. This is bad news for millennials trying to make the most of their money, so be sure to read the fine print on any account terms and conditions!
With so many banks and so many different types of accounts to choose from, finding one to suit your lifestyle and specific needs shouldn’t be too difficult. Consider how simple it is to open an account, how straightforward it is to set up your standing orders, whether you are able to close your account and move to another bank in the future with ease if you wish, and whether you are able to set up sub-accounts under one main checking account if you’re an organized saver. The questions we could add here are probably endless, but these are the questions you need to ask yourself, and only you will know the answers. Each bank has a differing digital offering, for example, if one of your must-haves is an app to conduct your banking, ensure the bank you’re considering has one – because some banks still don’t! Also, a major thing to consider is whether you want a bank that has walk-in branches or are you happy going to a bank that only operates online?
4. Minimum Requirements
Have you checked the minimum requirements and the type of accounts you’re looking to open? Do you meet their requirements? Perhaps it’s a minimum balance you’ll need to have at all times, or at least one bill is to be paid via direct debit per month, or the number of transactions you can make without being charged. Or does your paycheck need to be paid into the new account every month? These are just some of the possible stipulations, and each bank has different rules attached to their account types, so be sure that you’ll meet these each month to avoid being charged excessive fees.
5. Type of Financial Institution
There are three main types of institutions: traditional banks, credit unions, and online banks. Depending on your needs, one of these is going to suit you better than the others. Here’s a brief overview of their differences:
A traditional bank will offer financial products and services to their customers via a number of branches placed around the country as well as ATMs. Customers can visit the bank when they need assistance or access their account via the bank’s online platform. The number of bricks and mortar branches country-wide are usually plentiful.
Credit unions are nonprofit financial co-ops, which means they are owned by their members as well as controlled by them via a democratic process. Credit unions will have a set of criteria to meet in order to be able to become a member. They provide credit to their customers (members) at highly competitive rates along with some other products to service their members’ needs. Being non-profit, any “profits” made are refunded to the members by way of lower fees and interest rates on loans, plus higher interest rates on positive balances in savings and checking accounts.
Online banks are, as the name might suggest, solely online. They have a similar product offered by traditional banks, but it’s not possible to walk into a branch if you need face to face help. Oftentimes rates will be a bit more competitive thanks to the bank not having to pay high rents and salaries to run physical branches.
Banking is such a competitive marketplace that it can be difficult to know which type of new bank account to open and which type of financial institution to use. We hope this information has been useful in your search for the right bank.