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Ask the expert: Is there more to choosing a bank than meets the eye?

| MoneyRates.com Senior Financial Analyst, CFA
min read

Q: I read and hear a lot of discussion about how to choose a bank, but with all the information available online about the best CD rates, savings accounts, etc., isn't it fairly straightforward? Is there more to it than just picking the best rate?

A: Comparing rates on CDs, savings accounts, and money market accounts is a great way to start when choosing a bank, but there is more to it than that. Consider the following issues:

  • Deciding what type of account you want. Before you compare rates, you have to decide what your needs are. You can get the highest rates with a long-term CD, but that entails being willing to lock up your money. Also, money market rates are generally higher than savings account rates, but this is not always true at specific banks.
  • Multiple account needs. If you want to add a checking account to your savings or money market account, then the decision is about more than just interest rates. Checking account fees and the availability of branches and ATMs become factors as well.
  • The size of your deposit. Different banks have different rate offers at different deposit levels. So, you need to choose the best rate for the amount of money you intend to deposit, not simply the best of all rates out there.
  • Rate consistency. MoneyRates.com recently launched a new feature called America's Best Rates. This shows which banks have consistently offered the best rates over the past calendar quarter. After all, eye-catching rate offers may come and go, but unless you lock your rate in with a CD, you are going to want a bank that maintains consistently high rates.

MoneyRates.com would not be in business if rate information were not important, but there are other factors to consider so you can make the best use of that information when choosing a bank.

Got a financial question about savings, investing, or banking? MoneyRates.com invites you to submit your questions to our "Ask the Expert" feature. Just go to the MoneyRates.com home page and look for the "Ask the Expert" box on the lower left.

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Richard Barrington:
Richard Barrington is the primary spokesperson and personal finance expert for MoneyRates.com… (more)
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