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Finding the Right Financial Institution

Published: October 26, 2015

Choosing the right financial institution is an important step in your financial future. As with any decision, it’s important to figure out what you want and need beforehand. There are countless banks to consider—some nationwide and some local, smaller banks (thrifts or mutual) which differ from the big banks and there are credit unions, which some people opt to use.

One main point to keep in mind…bigger may not be better. Understanding your financial institution’s background may also impact your choice.

How do Big Banks, Mutuals or Thrifts and Credit Unions Differ?

There are many misconceptions between big banks and the small savings and loans, also called Mutuals or Thrifts as well as the status of the credit union, as explained below:

Big Banks:

Typically owned and operated by a group of investors with capital. They are for profit, distributing their profits to stockholders.

Federally insured by the Federal Deposit Insurance Corporation (FDIC).

May offer greater accessibility and a wide arrange of service.

Mutuals (Many features more similar to a Credit Union)

Member owned and operated for the benefit of their depositors

Federally insured by the Federal Deposit Insurance Corporation (FDIC)

They do pay income taxes, contributing to the financial assistance of our schools, hospitals and many other significant organizations.

May offer lower-cost services and higher interest rates on savings with no stockholder pressure

Credit Unions:

Ownership is the same as a Mutual

Not for profit, therefore do not pay federal and state income tax, no contributing dollars paid towards our education or health systems, among many other areas.

Insured by the National Credit Union Administration

May offer lower-cost services and higher interest rates on savings

When researching your financial institution:

1. How long has it been in business? Longevity is very important…is it a newly established business or have they been operating for a number of years?

2. How does the financial institution rate? This link offers ratings on all banks and credit unions:

3. Does the financial institution have branches in the areas where you work and live? In today’s banking world, many times if you do not have an account with a local financial institution, you may not be able to cash checks, receive free ATM use among other financial services.

4. Is there a customer service representative available to speak with either in person or on the phone? Opening a deposit account may not require an actual person to person conversation, however, if an error or other concern develops, frustration may occur if there is no real person to assist you. Or when it comes time to buy a house, this being one of the most important decisions in your life, a person to person meeting many times makes the process much less confusing and may be beneficial when choosing the mortgage product.

Other points to consider:

Location. Availability of ATMs. The ATMs owned by your bank won’t charge you to withdraw cash, but other banks’ ATMs will. Does the financial institution have machines in locations that are convenient for you? Do they reimburse ATM fees?

Hours. Do you work during the day? Perhaps you need a financial institution with extended hours.

Customer service. Do their customer service offerings fit your needs?

Online banking. The Internet has made it very convenient to keep track of your finances online. Find out if the institution you’re considering provides online access to your account.

Other Benefits

These days, financial institutions are more than just places to keep your money. Many serve as one-stop financial service shops. In addition to checking and savings accounts and credit cards, here are some services and products offered by most financial institutions:

Online or mobile banking

Automatic bill pay

Lines of credit

Personal, business and auto loans


Health savings accounts

Retirement programs

Credit cards

Financial planning

Having many of these services in one place can provide not only convenience, but also savings. Many financial institutions will offer lower fees and higher interest to customers who use multiple services and products.