Four Things To Ask Of Your Bank

Most of us pick a bank based on referrals made by family and friends. This is no doubt a fantastic way to do it because it is based on actual customer experiences, but one has to be careful because your bank has an active role to play in ensuring that you are managing your finances prudently. The question shouldn’t just be “which is the best bank?”, but should be aligned with what you really need from your bank.

Depending on your financial goals, personal financial personality, and other factors, these are some of the things to look out for in a personal banking provider.

1. Ability to automate your finances at a reasonable cost: If there is one thing a good bank should enable you to do at a reasonable cost, its automation. Why do should we automate our finances? Because relying on our willpower each time we receive our paychecks is a terrible financial management strategy – our willpower is at its weakest when that direct deposit hits our accounts. Instead, we should build in systems that take out all the money we want out of our accounts before we start spending. This includes savings, utilities, rent, contribution to parents etc. You don’t want to start negotiating with yourself at the mall like, “Do I really need to save all this money this month, or I can spend just a bit of it, then make up for the savings next month?” That never ends well. Choose a bank that either has reasonable standing order charges or has a reasonably priced, one-charge account.

2. Ability to bundle your financial transactions: When we had this Twitter Chat about banking, many people responded with the wish that their bankers could inform them about the other non-banking services they offer.

This evening, we have our third #52WeekChallenge Twitter chat.

What should your bank be doing to help you along on your journey to financial independence?

Tune in! pic.twitter.com/e5XlWyrbsV

— Elsa Majimbo stan account (@RookieKE) March 11, 2018

Today, most banks have an investment arm that deals with the stock market and money market investments and others, and an insurance agency. Find out if it is possible to link all these to your bank account. There are benefits to this. Some banks will (based on your banking history), give you free, or reasonably priced insurance financing. The ability to automate the transfer of cash from your checking account into your investment account will set you on that path to consistent saving.

3. Does the bank lend to “people like you”? You may wonder what I mean by this. Don’t banks lend to everyone who qualifies for a loan? Nope. Every bank has its customer profile/profiles for its different types of credit products. I got this lesson first hand the first time I attempted to apply for an unsecured personal loan from one of our top banks. Though my banking history was impeccable, they told me that they only give unsecured personal loans to employees of big corporations. When shopping for my next bank, the one question I had was:

Do you lend to employees of small businesses?

This question will necessarily cause you to make certain tradeoffs, depending on what you really need in a bank. For example, the small business owner may have to choose a bank that does not have swanky banking halls but pays attention to small business owners. If your need is Super Platinum banking, it is possible that when its time to lend you money, they may need that your net worth is also Super Platinum.

4. Finally, is it convenient (and cheap enough) to bank? This seems obvious, but a good bank has to be convenient to bank with, othewise it becomes an expensive affair. With technology such as Internet/Mobile banking, Video Teller Machines (launched by NIC Bank last month), and others, the ideal bank should save you the traffic and time spent going to the branch. Be wary of banks that charge you for every interaction you have with them, e.g checking your balance on the web, or on the app – these tech tools save the banks costs, they should pass these savings onto the customers.

Finally, if you bank with NIC Bank, have you tried their VTM inside The Mall? If so, what did you think of the experience? If not, why?