I opened my first bank account when I was about to join the University. What I considered most during that time was the bank that had the lowest minimum balance requirements. Why? Because I was not working, all I needed was an account to receive the higher education loan.
My situation can be similar to yours. Opening a bank account depends on what you want to do with the bank account. For instance, once you need to get a payday loan, you would consider getting an account in a bank that supports that.
Before deciding what bank account to open, let me first highlight the common types of banks found in any country.
The common types of banks
The type of bank depends on the kind of services they provide to society or the other banks.
The Retail banks
Retail banks offer services like credit cards, savings accounts, loans, and mortgages to their clients. At least everyone who is paid via a bank check has an account in this type of bank. In addition, clients can get payday loans in this bank as they wait to get paid at the end of the month.
The Central Banks
Every country in the world has this kind of bank. The Central Bank of each country regulates the other types of banks in the country.
Functions of central banks
- They protect consumers against high-interest rates by the other types of banks
- They also stabilize the financial markets
- It conducts monetary policy by reducing the amount of money in circulation
- Handles the buying and selling of government bonds
Investment banks manage the trading of stocks between companies and investors. In addition, they also educate people who need to know about investing in stocks.
Despite commercial banks helping every consumer, their main goal is usually to help grow businesses. Whether small or large, any company can rely on commercial banks to open savings accounts or take business loans.
Cooperative banks are owned and managed by a group of individuals. The members of the bank’s board determine what should be done and what not to do in the banks. These kinds of banks can either be retail or commercial banks. They also give loans and accounts to both individuals and businesses. Cooperative banks also give out payday loans to their clients who receive salaries via the bank.
Savings and Loan Association banks
Savings and loan associations are owned by institutions that help people to buy homes. They also provide individuals with mortgages and some other loans to finance their home renovations.
In addition, savings and loan associations offer checking accounts and savings accounts to their clients.
These unions serve the same purpose as the other banks, such as offering checking accounts and providing loans and savings accounts to the clients. The only difference is that the other banks are profit-oriented, unlike the credit unions.
The members of credit unions make decisions on how to run their associations.
Which bank is suitable for you?
Just like you have seen, all banks have different goals and purposes, the same way you do. You can choose the banks offer same day payday loans with lower interest rates. Choosing the type of bank, you want to associate yourself with can depend on the following factors.
- The kind of account you want, either a savings or a loans account
- Consider things like the security of your funds
- The bank that gives ATM cards is more suitable for faster withdrawals
- The minimum account balances that your account should have
- The loan intrest rates as well as savings interest rates
- Availability of online services could be an added advantage
Always make sure you get a bank that has the preferences you consider from the word go. You don’t want to be jumping from one bank to another when searching for a specific purpose.