What's your favorite restaurant? We're not talking about the closest one that you run to when you’re in a hurry, or the one that you visit most often because it's super kid-friendly, or even the one that is wicked pricy, but when your in-laws come to town, you take them there to impress them.
No, think about the one you discovered on that trip to the Gulf Coast. Or the one you used to visit when you were first dating. Or the one that always reminds you of your college trip to Italy. You know the one: It's full of ambiance and servers who know exactly when to refill your wine glass. You've eaten there a hundred times and still may not be able to quote prices off the menu because the value always exceeds the bottom line. That's your favorite restaurant.
Now think about the bank or credit union that you love — the one that rocks your world and fills you with joy. While we know that certificates of deposit and a quick-and-easy mobile app are not as delectable as warm rolls slathered in honey butter spread, or a glass of your favorite pinot noir, doesn't it make sense that if someone is receiving all your money, you ought to put your dollars where it matters? Why not bank with a financial institution that makes you feel good about your choice?
Tangible products and services are a good place to start
How to find a good local bank or credit union starts with a few basic choices, but in fact the identifiable products that are on your checklist are more an evaluation of your needs. (We'll get to your wants in a bit.)
Community bank versus big bank. Chances are when you are surfing the internet or watching a network television broadcast, you’re seeing ads for the big banks that have branches practically everywhere. Naturally, these names come to mind when you start shopping around for the ideal financial institution. “Ideal" is an important word to keep in mind. The account products and financial services of a big bank are not designed for you — they’re designed for everyone. If you’re looking for a bank or credit union that fits your needs, don't choose a megabank where the number one requirement is that you have to fit into their mold.
What you already like. You might have a checking account where you earn rewards, or with an interest rate paid based on your balance. If you like that, make it a priority. If you don't have extra perks like cash back, ATM fee refunds, or no monthly fee, keep looking. You might just qualify for a higher interest rate than what you currently receive. These benefits can make the difference when you look at your statement each month.
Spender versus saver. Depending on whether you use your primary bank account as a place to keep the cash flowing, or you put every extra cent into your savings account and enjoy watching it grow month after month, you might prioritize types of deposit accounts (longer-term certificate accounts, a money market account, etc.) that appeal to the way you prefer to manage your money.
Cash on hand or swipe/insert/tap. If you know where every branch and network ATM is located in a 25-mile radius, it's likely you prefer to keep cash on hand for everyday expenses. You also probably do quick balance checks to make sure there are no unexpected surprises. Many credit unions belong to vast networks of ATMs, and community banks might also offer refunds on ATM fees. If you cannot remember when the last time you used an ATM was, read on...
Online platform and mobile apps. In the current tap-to-pay, insert-chip-here, magnetic-strip-swiping world, you may not have used an ATM in months, and only because you wanted to hit the community yard sale event. If you rely on your debit card or use direct deposit to get your money where it needs to be, you likely utilize your online banking access to keep tabs on your balance. Yes, you can see images of a financial institution’s mobile app in the Play Store or App Store, but you want to see it in motion. What good is a static image in an app store for understanding the functionality of an app or website? Almost every financial app out there has a 4.5 rating. For account holders who rely exclusively on their mobile devices, the app is important, and showing how the app works is a much better level of service than a megabank or neobank just telling people to download. Ask to preview your prospective bank’s online and mobile offerings if this makes a difference in your world.
Be a borrower. Despite what Shakespeare may have taught us in high school, there are times when borrowing money becomes a fact of life. Whether a car loan, a mortgage, or a personal loan or line of credit, if you think you are going to have a need in the future, ask questions about the process. The more transparent the answers, the higher the likelihood that the process will be equally straightforward. If you are a credit union member, you may experience a different step-by-step approval process than you would with a community bank. But at either you will likely have better opportunities for a lower interest rate than you would experience at a larger bank, since their favorite borrowers are big businesses.
Small business owners need love, too. Speaking of businesses, if you are a small business owner, your list of needs when looking for a bank or credit union likely includes a business loan and a business checking account in addition to your personal banking wish list. Even if your plan is only to migrate your personal accounts for starters, as you build a relationship with a nearby community bank or a local credit union, you might find the relationship could also benefit your business. Consider the possibility that your new financial institution may be willing to compete for your business — both as their customer and on your behalf.
Necessity is the mother of integration. If you already have your money spread out across an array of credit card accounts, spending platforms, and investment companies, you're hardly alone. Many Americans keep their money spread out across a web of financial locations, and finding a way to consolidate and integrate your money into streamlined options may be the way to prioritize your financial self-care and be proud of your money. (Hopefully your credit score, too.) Your primary financial institution — the hub of all your financial spokes — might well be the place where you want your money to reside.
Intangible qualities make the difference
You have your list of must-haves when looking for a new financial institution, but don't you think you deserve more than just what you need? This is the part when it's time to consider what you want, and not just from your bank or credit union. What are your priorities in life? What is the financial equivalent of that one unforgettable bowl of linguini that you had at the tiny ristorante in Rome — but for where you want to place your money?
Not your parents' traditional bank. Fact: Managing your money has dramatically changed this millennium. (Just ask your parents or grandparents about life before ATMs and the hours spent in the drive-through lane on payday.) But it's more than technology. Millennials and Gen Z see the financial storms of their lifetimes as the primary motivators as to how they keep tabs on their money. With every cybercrime, we hug our passwords and embrace multi-factor authentication a bit more closely. You absolutely want trustworthiness and security to be at the top of your wish list, and this is equal parts the login to your banking app and the interactions with your bank or credit union. Straight up: When was the last time you completely trusted a megabank to have your best interests at heart?
You have a plan. You might just be trying to get through the day most days, or maybe at least limp your way to the weekend, but deep down you have a plan for where you want to be in the future. Whether that's in five years, or in fifty years, the direction in which you’re headed now will heavily influence your financial plans. While talking with a stranger about money matters still feels taboo, or maybe just awkward, imagine if you and your local banker could talk about your future plans and how your money is going to get you there. Definitely put that level of communication on your list of wants.
Think small, too. In addition to your life plan, let's face it, little hiccups also mess with our daily lives. Whoops... an unexpected transaction hits your account (you really meant to cancel that streaming service before the free trial period ended), and you’re hit with an overdraft fee. You want to buy a new car, but your credit score is only *meh*. Find a financial institution where you feel comfortable asking for help when you need it. Let’s be honest, they know how much you earn and how much money you have saved. Odds are the 800 number or the chat bot at your neobank won't be quite as understanding about life's speed bumps.
Where everybody knows your name. Simple as it sounds, there's nothing wrong with having your bank or credit union be a familiar place. Not that you want everyone yelling, "Norm!" when you enter, but you really want them to know when someone tries to cash a fake check with your name on it. It's almost the opposite of your favorite pub knowing your drink of choice, but it's just another way your primary financial institution shows you the love.
Sustainable banking in your community. Lastly, and this is a big one, does your bank or credit union align with your values and ideals? Whether supporting the local high school after-prom party or recognizing the police and fire department efforts after a nearby natural disaster, how a financial institution shows up in your community should reflect what matters to you where you live. A good community financial institution is both an economic pillar and a promoter of the neighborhood's greater good. When a community is economically sustained, everyone who lives, works, goes to school, and serves in the community thrives.
Make the switch
Okay, now you know what you're looking for in a bank or credit union, so what's stopping you from making the move from an impersonal, faraway megabank to the kind of financial institution that you want to support? While your community bank or credit union will never have that killer crème brulée that rocks your world, you will see the value in where you choose to place your financial resources in the same way you see value in the restaurants and shops and farmers markets and community fairs and fundraisers that make your town the place you love to live.
Celebrate and savor your hard work. Recognize when the people who hold onto your money for you are making choices that align with your own. You're proud of your money. Keep it someplace that matters to you.
Discover more about Sustainable Banking in our previous blog post, "Weighing the difference: Local banks versus national banks."