You are in the driver’s seat when choosing a financial institution. The choice is yours. There is no wrong decision. No matter what type of banking institution you choose, your money is secure.
In addition to the items mentioned earlier about the type of savings account, physically getting to your bank or a branch ATM is a practical consideration. Traditional banks tend to have more locations and more operating hours, but credit unions tend to be smaller, so they may have fewer banks but offer higher interest rates. What if you choose an online-only bank? If all your transactions are completed online, are you good with that? The online banking companies operating costs are usually lower because they don’t have all the overhead costs associated with traditional banks. Therefore, the type of savings accounts offered by online banks is typically high-yield savings accounts. These types of accounts can offer a higher annual percentage yield rate. Of course, this will help your money grow more quickly.
The type of bank you choose is a personal decision. Take a look at your goals to help you determine your answer. Keep in mind that the goal is to save 20% of your net income so you will have money for your emergency account and other future expenses. The savings goal percentage is not an all or nothing concept! If you can’t save 20%, set your own beginning savings goals, and work up to the 20% goal. Saving something is better than nothing.