In a bid to get the best financial services, you may find yourself considering the idea of trying several banks. However, you might want to consider a one-stop shop for all your banking services. It can prove to be a more convenient option especially if you choose a bank that caters to your specific financial needs. To help you make an even better decision, here are the pros and cons of only using one bank for all your finances.
It is easier to ensure the security of your accounts in one bank
The levels of security in banks are different; the higher the security, the more the measures required from you. You may be required to have a customer ID, password, pin, and secret questions among other things. If you choose a bank with exceptional security, you can put all the necessary measures to ensure that your money is secure.
These may include; limiting the amount of money per withdrawal, maintaining the confidentiality of your account details, getting alerts on any account activity, etc. It will be a bit hectic to take this personal responsibility for the safety of your money with multiple banks.
Your loyalty is rewarded with personalized service
If you do all your banking with one bank, your relationship with them grows with time and so does the treatment you receive. This leads to a better understanding of your account activity in terms of expenditure, loan payments, credit card payments, and other financial transactions.
The bank can make a more personalized decision in situations like overdraft extension, credit rating, saving interests, and account fees. With good standing, you are entitled to better products, prompt response and you never know, a little bending of the rules at a time when you need it.
It is easier to keep track of your money
Dealing with one bank comes in handy especially when you have a lot going on in your life financially. You can keep track of expenditures like alimony, child support, student and other loan repayments, standing orders, etc. as well as debits from your various sources of income.
In a nutshell, a visit to your bank or a request for a bank statement will show you all your account’s(s’) activity for some time. This is much easier when you are dealing with one bank.
You can have FDIC cover for up to $250,000 for each account
You do not need more than one bank just because you have more than $250,000 individually or $500,000 jointly. You can put your money in several eligible FDIC accounts in the same bank. These include; Negotiable order of withdrawal (NWO) accounts, Savings accounts, money market deposit accounts, and certificates of deposit (CDs).
Other options can be investing your money manually or automatically when it reaches a certain limit. This ensures that you don’t have all that money sitting in your account without earning you some interest.
You lose the opportunity for better rates or terms
No particular bank offers the best of all as a package. However, you can choose to opt for the best that each bank has to offer. When you use one bank only, you miss out on what others can give. Online banks for example are known to offer better interest rates compared to traditional banks. The latter on the other hand provides better checking accounts.
Increased risk of losses
In case someone gets hold of your account information or in a case of identity theft, your account can be swept clean. This is even worse if your accounts are linked to cover each other when credit is low.
You may lose out on FDIC cover
If you happen to have more money than can fit into FDIC-eligible accounts, you may lose coverage for the extra amount. This can lead to losses in case the bank goes under. Spreading it among different banks ensures that it is secure.
Using only one bank for your finances has both its advantages and disadvantages. Your unique needs and preferences should guide you to make an informed decision on where to maintain your accounts. The above information gives you a place to start.