Have you recently completed high school or university and are looking to gain some financial independence? Well, opening a bank account is a good place to start.
Looking for a place to put your money can be a tedious and confusing process especially when most banks offer different accounts that offer different benefits, features, and requirements.
Most people advise that the bank you eventually decide to choose should match your occupation or profession, be it a university student, an employee, an entrepreneur or a senior who is about to retire. But using that standard cannot always work for everyone.
So how do you make the right choice? To make a good decision it is vital for you to first create your short-term, mid-term and long-term financial goals, then evaluate your financial needs and then think about how these can be tied up with the services you would want from the bank.
It is important to assess the role you expect your potential bank to play as they shall be a key pillar towards helping you achieve and fulfill these goals.
Depending on what your goals are, before you settle on a commercial bank, there are a number of financial institutions where you can put your money. These institutions can offer you a vast variety of services and benefits that may even be more beneficial to you as a beginner. The primary ones include:
- Credit Unions (also known as SACCOs)
- Micro-finance institutions (MFIs)
- Digital and mobile money platforms (such as Mshwari)
To help you choose the right bank, be sure to ask yourself:
Does it have the accounts that match my needs?
This largely depends on your personal tastes and preferences. Some people prefer nothing more than a current account while others want a savings account, access credit services or take out private student loans via the same bank.
Whatever your reasons for opening the bank account you must consider your financial future and what type of banking products and services are vital to you.
Is the bank conveniently placed and accessible?
If you prefer to visit bank branches or use an ATM, then you must consider the location and accessibility of your bank.
If you are a person who does not travel a lot then the latter of the two may not matter, however, if you are a frequent traveler then accessibility comes into play.
In addition to this, internet and mobile banking platforms in Kenya offer not only convenience but are able to allow you more access to your money. Therefore ensure your bank shall allow you frequent access to these platforms.
What are the banking fees and incentives?
Each financial institution has its own system of fees and ways of charging clients. Most banks are dependent on these charges to generate revenues.
While bigger banks offer some incentives such as no ledger fees, smaller financial institutions such as Microfinance institutions and SACCOs offer more competitive rates without banking charges.
These smaller institutions can do this because they are not reliant on fees to generate their income. They instead offer better incentives to consumers opening new accounts and thus are able to compete with larger brands. If you want flexibility and personal service, these institutions are suitable for you.
So, if you want flexibility and a more personalized service, these smaller institutions are suitable for you. Most larger commercial banks are tailored to serve corporate clients better.
How safe are my funds?
It is important for you to learn more about the bank in terms of its business practices and its financial position. Only recently certain banks in the country underwent receivership due to a number of reasons.
No consumer wants to deposit money in a bank only to learn they cannot access their money. Another thing to consider is how secure is its banking platforms, especially for those that offer internet and mobile banking services.
Therefore, it is very important to look around when you are shopping for a bank. While accessibility and convenience are vital, security is becoming more crucial because of the advancement of internet and mobile banking services.
Before you sign up with a bank, also ensure that you obtain a copy of bank tariff guides, so you can check the actual bank charges and rates that you will be subject to.
Finding the right bank does not need to be difficult. After you have decided on your financial goals, what products and services most matter to you, examine the available options.
Do your research by checking various the websites of potential banks and financial institutions, or alternatively, just visit a bank branch and learn more about them. You can also involve your family members and friends who can help you narrow down the options.
What was your experience when choosing your first bank, and is it your current bank? Did you consider any of the above tips? Let us know what you think in the comment section below.