Finding a fantastic bank while you’re in the military may seem simple. You’ll just find one that is military friendly and provides incentives for your business. Simple, right? Not so fast. Some banks offer incentives for military members and even free accounts, but they may not have the best service or rates. Just like after choosing the cheaper option, choosing the easy incentive in banking may leave you with a lot of regrets.
Let’s talk about some of the things members of the military should look for when opening a new account. Also, what questions do you think should be answered before investing your money in a new bank. Because you are investing your money in the bank as a business, so you want to make sure their business practices and spending guidelines are in line with what you believe. You don’t want to rush into any decision involving your money.
What do you Need in a Bank?
Just like when you are looking for TDY lodging, start with your current needs. Do you need a bank that offers Checking, Savings, CD’s, IRA’s, Insurance, and loans? Or are you looking for something a little less complicated, just somewhere safe to keep your funds and deposits your paychecks?
Many banks offer free checking accounts, and some have requirements of minimum monthly balances, product quotas, or a slew of other things that you will need to satisfy to earn a free account. However, there are some accounts that are totally free. When you start with what you need and then add on what you may want, you’ll find the right banking option for you – and it may involve multiple banks.
Watch out for Fees
There’s nothing worse than paying a fee for using your own money. Luckily, Both USAA and Navy Federal Credit Union offer free checking accounts with no monthly service fees. USAA requires a minimum deposit of $25 to open a Classic Checking. Navy Federal does not have a minimum deposit requirement, but they do have a direct deposit requirement to maintain a free account.
Before opening any account, read the fine print. Know all the terms and conditions before you commit to banking with a company. This is especially important for military families, as we move often. You don’t want a bank that charges you international fees, or makes it difficult to use your debit card outside of the US.
Saving for the Future
Do your long-term goals include buying a house? Saving money for retirement, your kids’ education, and even a down payment on your forever home can seem intimidating. But saving is necessary. Pay attention to interest rates and savings options, as they may change based on the amount, year, and institution.
Interest rates on savings accounts will vary by the type of account. In 2018, rates fluctuated between 0.20% and 3.25%. The latter amount usually is for a CD (Certificate of Deposit) or similar type of high balance savings account. Navy Federal offers a CD account called a Special Easy Start™ Certificate with a minimum opening balance of only $50 and a 12-month term.
Other Reasons to Need a Bank
Almost all banks offer car loans and mortgages, as well as life and property insurance. As a military family, you should take your time and shop around when searching for a loan. When it comes to these types of products, an APR (Annual Percentage Rate) can vastly differ from bank to bank.
Doing your research when looking to open a new bank account will be the best way to ensure you are doing the right thing with your money. Take the time to decide what’s important. Do you want to keep this account for a while or are you fulfilling an immediate need? Are rates and multiple product options a concern of yours?
Check out local branches and credit unions as well as the larger banks. They may be able to offer something the big brands cannot. It’s worth a look. Do not let all the terms, agreements, and bank jargon wear you down. It’s your money, and your financial security is important. We want you to have a successful military career and post-military life, and that starts now.
Written by: Marla Bautista