Establishing a Relationship with a Financial Institution

A good working relationship with a financial institution is part of a solid financial foundation. Finding the right one to work with is important. There are probably dozens, if not hundreds, of institutions that offer the products and services you want and need located close by or with which you can create an electronic relationship.

Here are some things to consider when choosing an institution:

  • Location of branches and ATMs - You want an institution that is relatively convenient. While you may not visit the branch often, it is nice to know that you can physically go and talk to someone if necessary. You also want to make sure that there are ATMs conveniently located (or that the institution has a partnership allowing use of more ATMs) so you do not pay fees for using ATMs of another institution.
  • Fairly priced products and services - Not all institutions are the same. Be sure to understand and compare the fees charged on different types of accounts: Are there hidden fees or stipulations that something is only free if you enroll in a high-cost service? Ask about additional fees or penalties for low balances or excessive transactions.
  • A pleasant way of doing business - Your financial institution should be your partner on the road to financial security. Find an institution that wants your business and will be transparent in their dealings with you. If you do not get a feeling of comfort when you walk into a branch or talk to someone on the phone, find another institution. Remember, you are the buyer and they are the seller of financial services.

Establishing the relationship
When you walk into a branch, be prepared and know what you need (or at lesast be ready to ask questions that will let you know what you need). You should also have the information that you'll need - Social Security number, identification and proof of residence - to open an account. Once there, you will probably want to talk with a personal banker instead of just going to a teller.

Institutions offer many types of accounts and other services.  Here are some of the basics:

  • Checking Account - This will probably be the main account that you use for your finances. Your paycheck will be deposited into it, you will use it to pay your bills, and you will withdraw money from it with an ATM card. You will probably have to choose from accounts that have different minimum levels, different limits on the number of monthly transactions and different interest rates. Choose one that will fit your needs and that has no or very minimal fees. If you are not planning on leaving large balances in the account, an account with no fees is probably better than one that pays a slightly higher interest rate. Even an account that pays no interest is better than one that has a $5 monthly fee. Be sure to ask about all these features.
  • Savings account - Even if you do not anticipate having much to save, open a savings account. It will pay more interest than your checking account and putting even small amounts into it will help you accumulate funds for a special purchase.  The fee on a basic savings account should also be very low.
  • ATM or Debit Card - If you are like most people, having a card to access the money in your account is essential. This will enable you to withdraw money when you need it and avoid carrying larger amounts of cash when you do not need it. Be sure the card is linked to both your checking and savings accounts and ask about fees related to having and/or using the card.  The fee should be minimal to non-existent.
  • Direct Deposit - Have your paycheck deposited electronically into your checking account. This will save you time and will put your money to work faster. Your institution will provide the information you need so you can provide your employer with the information they need.
  • Electronic Services - Access your accounts via internet connection or phone to add convenience to your financial transactions.

These are the basic services you will likely need. By having these services with one institution, your financial life will be simpler. In addition, an existing relationship with the institution may come in handy when you apply for an auto loan, mortgage or other services.


This information has been provided by Financial Wisdom Marketing Services, Inc. and is for educational purposes only.  Content from Financial Wisdom and/or Redwood Credit Union is not, in any way, intended to provide legal, tax, or financial advice.