Introduction
With a recent onslaught of banking mega-mergers and the on-going expansion of a new breed of financial institutions, deciding where and how to bank stock has become increasingly difficult. According to SNL Financial, a financial research firm, there were more than 4,800 bank mergers from 1990 through 2003. The Federal Deposit Insurance Corporation reports there are currently 10,271 FDIC-insured institutions in the United States. So how do you know which one is best for you?
Step 1
When considering which type of bank stock is right for you, you should first consider your needs as a customer. There are three primary categories of bank stock: big national banks, regional banks and Internet banks; each one offering a variety of services at different cost points.
Step 2
Big national banks, such as Citibank, Fleet, Wells Fargo and Bank One (in the midst of an acquisition by JP Morgan Chase), have Automated Teller Machines and branches all over the country, which is particularly useful if you travel frequently. They also provide the ease of one-stop-shopping for all your financial service needs. Through a big bank stock, you can often invest in mutual funds, buy insurance, get a credit card, get a mortgage, take out student loans, and more.
Step 3
. In addition, big bank stock tend to be the leaders when it comes to introducing innovative technologies, and if you happen to be wealthy, they offer an array of specialized services along with a personal banking representative to assist you.
Step 4
The most prominent and biggest asset of big national bank stock is their online accessibility and offerings. For example, Bank of America and Citibank now offer their customers free online bill paying services, while others, like Charles Schwab, charge a small monthly fee of $6.95.
Step 5
Online bill payment is an excellent way to keep track of your finances and an efficient way to balance your checkbook.While regional bank stock may lack a national presence, they are often more flexible and offer greater incentives for smaller accountholders. Specifically, as compared to their larger competitors, regional bank stock typically offers a more personal level of service and has lower fees. Moreover, regional bank stock is able to avoid the bureaucratic machinery of larger banks, making it easier to adapt to the needs of their community.
Features
Different from their brick and mortar counterparts, Internet banks offer ease without high fees. For example, according to a survey, to avoid fees, the average minimum balance on an interest-earning checking account at an Internet bank is $1,088 while the average at a traditional bank is closer to $2,627. In addition, Internet banks rarely charge their customers a fee for using another bank's Automated Teller Machines.
Comments
Even if a bank may advertise "free checking," always be sure to read the fine print to ensure you do not need to maintain a certain amount to avoid fees. For example, many banks require a minimum balance of some amount to qualify for free checking and customers who fall below this balance are assessed a charge later annually.
