Need somewhere to stash your hard-earned cash? Although a piggy bank is nice when you're young, it’s a good time to take a look into the world of banking. If you don’t know the difference between a credit union, mobile banks, and retail banks, you’ve come to the right place. Even if you do, we’ve made a guide helping you compare and contrast, so you can make the right decision for your dollars.
Retail Banks (The Classic)
Pros: Multiple locations across the U.S., wide range of credit cards, most widely used
Cons: ATM fees, deals & benefits can be hard to find
The standard for banking in the U.S. is still the retail bank. With providers like Bank of America, Chase, Wells Fargo, and Citigroup, these are the banks that you’ll see in every big city across the country. These banks are great for general banking needs, but as a result, they’re fairly static in what they offer. The big benefits here are the consistency - most retail banks have multiple branches for you to visit, an app and an online portal to check your balances, and a few options for you to choose from with credit cards. You probably won’t get crazy benefits or a life changing discount from these institutions, but they work, and they work well.
Online/Mobile Banking (The Millennial)
Pros: Waived ATM Fees, No Overdraft Fees, No Minimum Balance,
Cons: No physical branches, cash deposits are difficult, reaching people for support can be difficult
Online banking provides unique benefits that big institutions don’t offer, and are much easier to set up with no minimum deposits. With banks like Ally and Stash, you can get started banking in no time, all from the comfort of your home. With a ton of waived fees, cool NFC chip cards that let you tap or swipe to pay, and slick-looking apps that are aesthetic goals, online banking is an awesome way to get past things like ATM fees that a retail bank could never do. However, these banks do have a drawback - they’re pretty limited. It’s hard to find an online bank that offers multiple account types, and depositing cash into your account can be a bit of a hassle. For some, having an online banking account will cover all their needs, but leave this as a secondary account for the specific discounts.
Credit Union (The Mom)
Pros: University/State/City Sponsored, Lower Fees, Member Programs and Discounts
Cons: Less Physical Locations, Limited Product Offerings, Member Eligibility Requirements
Credit Unions are awesome in that they have lower fees across the board from traditional banks - this includes everything from transaction fees, ATM fees, and monthly fees, depending on the credit union. Also, they generally have higher interest rates on your savings, meaning that you’ll be able to generate a lot more passive income in less time. However, all this comes at a cost - you need to be able to become a member of the credit union to get these benefits. Depending on the credit union, this might mean you need to be a student (many universities partner with credit unions), work in a certain workplace, or be a resident of a certain state. Additionally, credit unions are smaller than retail banks, so in-person locations are fairly limited. If you’re able to take advantage of credit unions though, definitely do so, as you’ll make and save more than you can on retail banking.
This should give you a good foundation for deciding what bank is right for you. After deciding what type of bank you want to do business with, check out the banks we’ve mentioned in the article and see which one is the perfect fit!