How to choose a bank
Ok, so the process of changing banks or looking for one to get started with really isn’t as interesting as choosing which dessert to tuck into, but it’s necessary and could save you a lot of money in the long run. Here’s what to look out for.
Do they offer online banking?
Banking online means you’re more likely to manage your money properly because you can check your account at any time. Your bank is likely to funnel you in the direction of online money-management tools and mobile banking which is great because it means you can bank whenever you like, easily. Well, most of the time. Some banks are still unacceptably bad at the internet, so if their app keeps crashing your phone, think about moving on.
Can you find them on the high street?
Sometimes you need to talk to someone – to discuss your overdraft, open a new account or to do a complex transaction. You don’t want to travel miles for the pleasure, so make sure your bank has also mastered the art of face-to-face communication.
How much are their overdraft fees?
An almost inevitable by-product of being young is being occasionally overdrawn. It’s not ideal, and you should always try to avoid it, but it happens. So comparing different banks’ overdraft fees and other charges is a good way of saving money. Try to pick somewhere that offers an interest-free overdraft and compare what the fees are if you go overdrawn – they can be quite different. The Money Advice Service has a handy comparison tool.
How much free stuff can you get?
Sometimes banks offer all sorts of incentives from the exciting (skateboard!) and not-so-exciting-but-useful (low interest rates) to get you to bank with them. Be careful though and check how good your account with them will be after they’ve finished wooing you.
What are their ethics?
Some banks are more ethical than others, meaning they donate money to good causes or have rules about what kind of companies they’ll invest in. To an extent, ethics are a personal thing – you might care lots about climate change, for others it’s saving tigers. Move Your Money lets you check how ethical each bank and building society is.
Credit unions are super-ethical, but they tend to be local and not always ahead of the curve when it comes to online banking.
Is moving banks too much effort?
Switching banks is pretty simple. There are ‘switcher guarantees’ to make sure lots of the work is done for you. You just have to pick a bank you prefer and let them do all the work. We’d recommend that you keep an eye on your direct debits to make sure they all get transferred. You can get more information here. The switching process should take less than seven working days and you can even choose the date it all goes live.