Like HowStuffWorks on Facebook!

10 Things to Consider When Choosing a Bank


4
Loans & Other Products

As important as your past and current behavior should be in choosing a bank, it's also good to keep your future plans in mind. Banks make their money on loans and mortgages, which means there are many things to consider to ensure you're getting the best deal. Of course, you can always split your accounts across multiple banks -- and doing so could increase your wealth -- but most of us would prefer to form a relationship with the best of our options. You want to find a bank you can trust, and that includes trusting it to meet your future needs.

If you know that you'll be looking at a major purchase or expenditure in the next five years or so, and you'd like to finance through your everyday bank or credit union -- which sometimes means financial benefits, as a trusted customer -- you'll need to factor loan rates into your decision. If your needs are immediate, it's worth taking the time to look for special deals: You can lock in those rates now.

If you're more interested in making your money work for you right now, you should definitely consider credit unions and online banks. Their rates are usually much better than those at local banks. Remember to compare annual percentage yields (APY) in this category as opposed to annual percentage rates (APR), since different institutions add your interest to the capital at different frequencies: The APY rate is a summation of these practices, so you know you're comparing apples to apples.