4 Things to look out for when opening a bank account

Written by Wellington Ayugi

A few months ago I moved from my hometown to Nairobi and decided to switch from my previous bank to a new one. My reasons for the change were partly because I was dissatisfied with my old bank, but my new bank had a branch close to my residence.

While so far the change has worked out well, lately I have been wondering if I was too hasty and should have done a little more research and comparison. More than a couple of times I have had to walk long distances from my office in search of an ATM or a bank agent, which can be quite a hassle.  However, what really concerns me is the fees I incur when I use my bank’s mobile app for specific functions.

When you are looking for a place to put your money, you should consider your options before making a decision. Before you start making comparisons, it’s helpful to identify what features you are looking for in a prospective banking partner.

While the banks may appear all the same on the surface, when you take a closer look you are bound to uncover some differences. To find the ideal banking partner here are some things you must have on your checklist.

Banking Fees

While some banks may still offer them, free current accounts are slowly becoming a thing of the past. With the recent banking cap in force, banks are increasingly relying on fees to make money. If you are not careful in your scrutiny, the different fees could take a significant chunk out of your cash flow.

The best thing you can do is to request for a fee schedule before you open an account. Depending on the bank, the fees in question may include, minimum balance fees, account opening fee, monthly maintenance fees, bill payment fees, online/mobile banking fees, cheque writing fees, overdraft, and transfer fees. Should you find a bank that provides free cheques, read the agreement carefully to be sure it’s truly free. Even its a few shillings here and there it can add up faster than you expect.

Bank Network

Storing your money away in a bank account doesn’t count for much if you have problems trying to access it when you need it. You should evaluate your lifestyle and determine how you prefer to conduct your financial affairs. Are you a businessman who needs to constantly visit brick-and-mortar branches for more personalized banking? Do you travel a lot and need to be able to withdraw cash from almost anywhere? Depending on your needs look at the number of branches the institution maintains across the country, the ATM network and penetration of banking agents.

If you visit the bank branch regularly to make deposits and process payments, you don’t want to drive around town to find one. Most Tier 1 banks have branches in all major towns and cities and thereby will be a perfect fit for your financial needs. Having a branch nearby also means you can report problems or make inquiries in person, rather than not getting your message across during a phone conversation.

Smaller banks tend to have ATM’s that are centralized in a specific location. If you almost always use ATM’s to make withdrawals and deposit money, you will be better served by a larger bank that has ATM’s close to business hubs, malls and entertainment spots.

You can also check out the Agency Banking network the institution has in place. Agency Banking is an arrangement where a bank contracts third-party retail networks, as banking agents. The Banking agents are authorized to sell certain products and services on behalf of the bank.

As it currently stands big banks have the largest agency banking networks, compared to smaller players in the banking space due to their extensive client base. Hence, if you prefer convenient banking wherever you go, you must ensure your bank has a evenly distributed network of banking agents.

Online or Mobile Banking

Branch networks are one way of accessing bank’s services. The rise of Internet banking has made it easier for people to send, receive and deposit money into their bank accounts. While online and mobile banking platforms have become more common, there are some banks that don’t offer these services.

Online and mobile banking makes it easy for people to sign up for accounts, apply for micro-loans, check on their account activity just to mention a few. The ideal bank would be one with both platforms that are reliable in regards to cost, speed and are most importantly, very secure.

Customer Service

When presented with a list of banks one of the key things you should look out for is their customer service. Ask yourself “does the bank value me as a customer or am I just another item in their cash flow column?” It is vital you are aware how quick they are in dealing with customer inquiries, and if they keep their customers in the loop by keeping them updated on product launches, and any changes to existing service guidelines.

Choosing the right bank is an important decision that can have either a positive or negative impact on your bottom line. Hence, it is important you take a moment to browse and compare different accounts and keep in mind the key features mentioned in the article to make the smart decision. Knowing what you want and what you don’t from your banking experience can help you look out for your wallet.


About the author

Wellington Ayugi

Wellington Ayugi handles Business Development at Covered and has a passion for personal finance, microfinance, and developments in financial technology