Choosing the Right Financial Institutions

by Joseph · 1 comment

in Personal Finance

I’ve been an employee of a local credit union for about two years now, and I’ve heard stories from a lot of people who have savings, checking accounts, loans or investment accounts at other financial institutions. I myself used to bank with one of the big banks and ever since I switched my accounts over to the credit union, I have been much happier with the handling of my finances. Most people think enough about their finances to be aware of how much they make and how much they spend. Unfortunately I don’t believe many people really ever think about choosing financial institutions that will benefit them the most, but rather which one is closest to their house, or which one their parents, siblings or spouse do business with. I think this quote from Sandra Masterson’s Banking Blog is a fantastic way of stating the need to think when choosing ones financial institution(s).

Choosing a [financial institution] is not a decision that should be made on a whim. A [financial institution] is supposed to save you [or help you earn] money, but without the proper amount of research it is possible to end up with one that costs you money.

I could not have said it better myself. I truly believe that time and effort should be put into researching local (or maybe even not local) institutions and the different products, rates and fees that they offer and charge. Here’s a quick list of the features I look for when choosing a bank (or credit union) as an example.

  • Convenience (this doesn’t necessarily mean closest)
  • Product Offerings (how competitive are their rates? what fees are associated with their deposit accounts?)

I have a large majority of all my financial accounts at two financial institutions: Desert Schools Federal Credit Union and USAA. Why did I choose to do my business with these institutions? I’ll start with Desert Schools, which I’ll refer to as DSFCU. I have had a savings and checking account at DSFCU for about three years. Before I banked with DSFCU, I banked with Chase and at one point Bank of America. I don’t have any horror stories from either of these big banks, but they always seemed to leave me longing for more. I learned about Desert Schools through a friend and decided to go check them out. I was pleasantly surprised to learn that not only did they offer free checking, but their savings rates were some of the highest I’d ever found (this is not including online savings banks which have low overhead and can thus offer higher rates). I became especially impressed with them when I noticed how typically friendly and helpful their staff was. Finally I appreciated the fact that they offered overdraft protection through a personal line of credit, which has saved me from overdraft fees on more than one occasion.

USAA is a financial institution that I am especially happy with. They cater themselves mostly to those in the military, which I find especially upsetting because the majority of my friends and family are not able to do business with them. USAA is a full-service financial services provider. They offer products including banking, insurance, and investing. I utilize at least one product from each of these categories. USAA is convenient to me because almost everything can be done online, and this includes depositing checks. I can make insurance payments, transfer funds (between USAA and other institutions) and purchase stocks or mutual funds. They also offer very competitive rates.

I’d like to make a quick list for you of some financial institutions that I’ve done business with in the past or that I am currently doing business with that I have found to be useful in helping me achieve my financial goals. I’ll list them by category.

Banks/Credit Unions

Brokerages/Retirement Accounts

Insurance

I hope that this has helped everyone recognize the value of researching financial institutions before doing business with them. I also hope that if you are currently unhappy with your financial institutions you do business with that you will take a day to sort out your finances and transfer your accounts to somewhere which will help you along the way to financial independence. Good luck!

People in the real estate business usually have a health insurance as well as other deals and those who work from home particularly use their business cards effectively.

{ 1 comment… read it below or add one }

Nigerian Entrepreneur November 6, 2008 at 9:32 am

Sound advice. Don’t wait until you need them before discovering that they are not really there for you. It does not take so long or cost so much to do a little research on that financial institution before pitching your tent with them. A little carefulness will save you a lot of headache and probably heartache as well. Nice post. Thanks for sharing.

Nigerian Entrepreneurs last blog post..Create Wealth From Real Assets Not Accounting Entries!

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