SELECTING a bank is like choosing a school for your child. It's a critical decision which will determine an institution to manage your valuable possession. Picking the right one depends on what you need from the financial house.
Financial planners say the first thing one should do when selecting a bank is to identify your particular need. Are you primarily concerned with a fat savings account? Do you want to borrow? Are you merely looking for the most convenient or secure place to hold your funds?
There are many factors to consider and, luckily, there are different financial institutions that provide different types of saving solutions that can match your desire.
Let's say that one of your goals is to buy a home. The ideal place to put your money would be a building society, says Cherryl Hanson-Simpson, personal finance consultant and Jamaica Observer columnist.
"You're really saving towards deposits for the home and you want to get a mortgage? Then a good place to have that type of account would be at a building society which could help you, because there are a couple of places that may have special interest rates if you have been saving with them for a number of years," she says.
At Jamaica National Building Society, long term members get better mortgage rates as well as the opportunity to benefit from discounts at other entities within the JN Group, the company said.
If you want to secure a loan, a credit union may just be the right option for you. At a credit union one can borrow multiple times the amount you have in a share account.
"You can save with a bank and still not get a loan from them," noted Hanson-Simpson.
"If you don't plan to borrow money from your credit union, it doesn't make sense to have a share account, because there is no interest," said the financial consultant.
Dealing with financial institutions can be a hassle. One can spend hours in a banking hall due to inefficient customer service, or waste valuable fuel driving around town in search of one of the bank's few automated business machines (ABMs). If your time is money, definitely take into account convenience when selecting a financial house. Online access, size of a branch network, and proximity to work or home are some of the factors you should consider, urged Hanson-Simpson.
More often than not, customers enter into a relationship with a financial institution to grow their money. And savers are always concerned with the bottom line. To ensure that you're getting bang for your buck at your bank, it is important that you know what kind of fees are associated with your account.
"That's a huge one, but most people never ask that question," said Hanson-Simpson.
Some banks charge customers for depositing money or taking out money, that you have put in. Some institutions have minimum balance requirements. Against this background, Hanson-Simpson warns customers to question fees before starting any form of relationship with a financial institution.
"Ask 'Under what circumstances would you take money from my account? Tell me all of the reasons why you'd have a need to take money from my account'", she advises.