I am a student trying to get my finances in order and I am stuck on choosing a checking account. Should I go with a credit union or an online bank? Both of my options are FDIC or NCUA insured, and I am not dealing with more than 10k, so I am covered there.
What I am really wondering about is the long-term experience. Is customer service better with a credit union? Are online banks more reliable over time? Or would a major bank actually be the better choice? Would love to hear what has worked for others.
If you move between two places (school and home), a national bank with branches and ATMs in both areas could be helpful.
For better customer service, a credit union is usually the way to go.
No matter what you pick, make sure it is a truly free checking account with no fees or minimums.
I would not keep more than a month of expenses in checking. Anything extra should go into a high-yield savings account at an online bank. Right now, anything above 4 percent is good, as long as there are no fees or restrictions. You can move money back and forth using ACH transfers.
@Mariana
That makes sense. I do live in the same state for both school and home, so I think a credit union would work for me. Thanks for the savings advice! I was planning to go with Ally since I have seen a lot of good things about them.
If you need branch access, check what is available near you. Otherwise, keeping everything in one place is easier. I use Citibank because I have my credit card with them too, and I like seeing everything in one place.
Major banks like Chase or Citi are everywhere, which is convenient. You really just need one checking and one savings account. The savings should also work as your emergency fund. A high-yield savings account is best, so check what fits your needs between local branches and online-only options.
After that, you can look into brokerage accounts. Some people keep extra money in another bank just for convenience, like if there is a bank near work that is different from the one near home.
@Jae
That makes sense. I wanted a credit card with Capital One, but I got denied, so I am opening a checking account with them first and will try again in a year. I might just stick with them for convenience. Thanks for your input!
A credit union is your best bet. No fees and real customer service. Big banks spend a lot on ads saying they care about you, but in reality, they just hit you with fees. A credit union actually treats you like a person. Plus, you can use 7-11 ATMs across the country without fees.
@Cleo
I did not know credit unions worked with 7-11 ATMs. That makes me feel better about going that route. Are there other networks that work with credit unions, or is 7-11 just an exception?
Storm said: @Cleo
I did not know credit unions worked with 7-11 ATMs. That makes me feel better about going that route. Are there other networks that work with credit unions, or is 7-11 just an exception?
Many credit unions use the Allpoint network, so you can find ATMs in places like CVS and some grocery stores.
Storm said: @Cleo
I did not know credit unions worked with 7-11 ATMs. That makes me feel better about going that route. Are there other networks that work with credit unions, or is 7-11 just an exception?
Checking accounts do not pay much interest, but if you want better returns, you can look into short-term Treasury bonds through TreasuryDirect. They can move money in and out of your credit union checking account with terms as short as four weeks.
Big banks tend to charge higher interest rates on loans, have worse customer service, and add hidden fees, so credit unions are usually the better choice.
@Cleo
I had not thought about that at all. That makes me lean even more toward credit unions since their loan rates are better too. Appreciate the advice!