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Retirees, do you have the right bank?

Here are checklists of what any bank you use should have, plus how to anticipate what your future needs are likely to be.

By Credit.com Jan 13, 2014 6:00PM
This post comes from George Schofield at partner site Credit.com.

Credit.com on MSN MoneyIf you are over 50, retired, or hoping to retire soon, now is a good time to make sure you've chosen the right bank. And your decision isn't just about the financial products and services you need now, but the ones you may need in the future.


Senior woman © CorbisNancy Butler (not her real name) learned this the hard way. The 56-year-old Tampa resident had banked with the local branch of a major national bank for 15 years. She had maxed out her credit cards during a prolonged period of unemployment, but with a new job and restored income, she approached her bank for a loan, intending to consolidate her credit card debt and slash her 15 percent interest rate. Yet even with a healthy 401K, $600,000 in home equity and a stellar credit score, her request was declined. Why?  It turns out that the staff of her branch had no local lending authority, and her banker made a poor case for her loan to the regional loan officer, who decided Nancy was a bad risk because she's self-employed.


Her story isn't unique. Banks may have gotten better at some of the impersonal kinds of service — P2P payments (electronic payments you make by email from your account to someone else's), mobile banking apps and ATM locations. They're not necessarily good at the services that are rooted in a personal relationship, where a bank manager knows you, your financial situation and your creditworthiness, and who can go to bat for you when you need help.


Looking to the future

So what makes a bank the right bank — now and in the future? At the very least, a bank should offer the following:

  • Convenience, both in terms of physical location and online offerings.
  • ATMs in your neighborhood or around the world, wherever you will be traveling or relocating.
  • The security of knowing that the staff in a bricks-and-mortar location knows who you are in case you have a problem or need advice.
  • Either interest paid on your deposits if there are low-cost fees, or minimum balance requirements in exchange for no fees. (Pay close attention to fees, because they can add up quickly and can be charged on a surprising list of things — like checking a balance online or reloading a prepaid debit card.)
  • The ability to make automatic deposits, transfers and withdrawals.
  • A checking or savings account and an investment account used for your retirement funding.
  • Overdraft protection.

Anticipating borrowing needs

Consider what your loan needs may be in the next three to five years. Some loans you'll likely anticipate, like a mortgage; others may come after an unwelcome surprise, like a roof that needs replacing. You may need to borrow for:

  • Home maintenance, repair and improvement. Think about that $15K replacement roof, a garage conversion for your widowed mother-in-law, updating the kitchen and bathrooms to prepare your house for sale, or the replacement of big-ticket items (appliances, windows, HVAC system).
  • Travel or other discretionary expenses (such a wedding, down payment assistance for an adult child's house purchase, a grandchild's college tuition) that you are committed to even if you have to borrow to do it.
  • Non-discretionary expenses you must make to keep your life flowing normally, such as a new car.
  • Small-business loans, in case you want to fund a new business toward the end of your career.

Then find out what lending authority your banker has, presuming your bank offers personal loans for these kinds of things. Research your lending officer's requirements — most likely your credit score, income, assets, and in the case of a startup, a business plan — before you sit down for a meeting.


Determining customer service must-haves

What constitutes great service is a personal matter. Do you want to be greeted by name by tellers? Are you irked when you have to fill out a form before a simple question can be answered by a banker? Or do you just want a great customer service agent on the phone if you want to make a transaction, ask a question or solve a problem? If the answer is the latter, you may be satisfied with online banks (like Ally), online mortgage lenders (like Lending Tree) and an independent financial adviser rather than a traditional bricks-and-mortar bank that can handle all of these functions.


If you want a single institution to handle your financial services, including checking, savings, credit cards, insurance, retirement and investment accounts, loans and online banking, you may find what you need — plus highly personal service — from a credit union or regional bank, both of which may offer the personal attention that global banks may not be able to match.


Whatever financial institution you choose, always make sure it is FDIC-insured.


Leveraging a local banker's network

There's another good reason to build a relationship with a banker, and it has nothing to do with money. It's about connections. Bankers are a trove of information on people and local businesses, as well as news that may have some bearing on the decisions you're about to make. These personal networks are particularly valuable if you've just moved somewhere new and need recommendations for real estate agents, medical professionals, mechanics and contractors, or if you simply have a question about neighborhoods, churches and great restaurants.


More from Credit.com:




21Comments
Jan 13, 2014 6:29PM
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Any bank that charges fees for everything is the wrong bank to have.

Some credit unions provide free checking accounts if you can keep a very small balance. Some even pay you dividends on your account, and charge very low interest on car loans.

Jan 13, 2014 9:14PM
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Banks only loan money to people who can prove they do not need money  -  Bob Hope.
Jan 14, 2014 10:24AM
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Don't even get a bank, get a credit union. Credit unions aren't in the business of screwing you. 
Jan 14, 2014 9:21AM
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The last bank that had any sort of " personal" knowledge of your situation was the savings and loan in " It's A Wonderful Life"  and that bank was a hollywood fantasy.  Keep this in mind- The bank employees are there for only one reason- to keep their jobs.  They will run from anything that could put the tiniest blemish on their records, so don't expect Jimmie Stewart to show up and loan you money on your word of honor.
Jan 14, 2014 12:20PM
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It is smart to have 2 banks. If a problem happens such as, the bank goes under,  gets taken over by another bank, or you account is compromised ,then having a stash of cash in a second bank helps. Make sure the second bank has an atm card and a check book. Since credit unions don't usually charge for checking that should be an easy second bank to have in the wings.    
Jan 14, 2014 11:40AM
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You know you are in the right bank when you are charged no fees for any of their services; no fee online banking; low-interest personal/business loans; flexible repayment plans(monthly/annually); interest on your checking; flexible loan qualification criteria; and, friendly, first-name greetings from the teller to the bank president.  Now that is a bank - the bank where I do business.  Can you believe it is possible to get a "character" or "signature" loan?  When you have a personal relationship with your banker, it is possible!!!  The BIGGEST advantage?  You have a bank that works for you, not against you.
Jan 14, 2014 12:29PM
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not only doe's the bank have NO LOCAL leanding rights but it's a so-called LEGAL WAY of AGE DISCRIMINATION!!!!  YES AGE DISCRIMINATION  That is illegal but the way they do it makes it OK with the feds. and if caught they just call it  "a misunderstanding".
Jan 14, 2014 12:15PM
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A credit union is the best bank.I dumped Bac after they tried to fee me to death and their interest

rates sucked.

Jan 14, 2014 11:52AM
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Whether you choose a bank or a credit union, don't forget to check on its strength. While there is no guaranty that a bank (or credit union) won't merge with another institution, you can arm yourself against opening an account in one that may be closed down by regulators.

 

Free star-ratings (5-Stars to Zero-Stars) are available on all federally-insured banks and credit unions at . Anything rated 5-Stars or 4-Stars is very strong and recommended by the rating firm whereas 2-Stars and below are considered "problematic". If you want to open an account at a place that is likely to be there for the long haul, choose from the first group.

 

BauerFinancial is an independent banj research firm that has been rating the nation's financial institutions since 1983.  No institution pays for its rating, nor can they avoid being rated.

Jan 14, 2014 1:32PM
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Credit Unions, can't be said enough.
Jan 14, 2014 1:50PM
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I never got a substantial refund from the profits of a credit union.  They just take the profits to build more locations and give bigger bonuses to their management.
Jan 13, 2014 9:21PM
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Retired???--at 50??? who are you kidding. The only people that can retire at 50-60- or even 70 years old must have worked for the government or inherited their money from their daddy! If you are 50 and don't have a job you might just as well start selling off all the assets you have worked for the last 30 years because you will not find a job and you will need to give up all you have earned to support those government parasites to pay for their pensions. You will have no choice.
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