In today’s day and age, when there are numerous banks and banking options to choose from, competition is fierce, and each bank has multiple offerings, it has become increasingly difficult to choose the right bank for yourself. Should you choose an Islamic Bank or a Conventional Bank, should you go for one that offers more types of accounts, or one that gives you easier internet banking?
One must also consider that a bank suitable for one person may not be appropriate for another. Student’s needs are different in comparison to a retired person; similarly, necessity of a young professional opening an account for salary purposes would be completely different from a business, using bank accounts for their operations.
Having said this, there are a few factors that you should consider when evaluating different banks for yourself:
- Your Specific Need:
Your specific need would be key in defining the kind of bank, bank account and services you need. First off, you would need to define your specific area of need. If you need a bank account for your salary to be deposited, then this might restrict you as your company may have a specific bank that they bank with. As a result, you would be restricted to use the same bank for your salary account. On the other hand, if you are looking for, say, foreign exchange accounts, then you would be limited to specific choices that allow foreign accounts to be opened like HBL, SCB and others. However, need is not the only thing that helps define which bank you should choose. Let’s look at other areas that you should consider.
- Minimum cash maintenance and opening balance requirement.
Minimum cash amount to be maintained in a bank account varies from bank to bank. It depends on the type of account you’re going with, the kind of category or classification you fall under, and the type of bank’s requirements at that instance in time. For example, SCB requires ZERO opening balance or minimum cash requirement in some accounts. However, in some savings accounts, their requirement goes up to PKR 500,000/- depending on the type of account (high profit/yield accounts). Similarly, HBL offers zero opening balance accounts as well, but some types require a minimum balance to be maintained. Once you define your need, this requirement becomes easy to choose from.
- ATM Network.
Banks install their ATM machines outside the branches; large branch network means abundance of ATM outlets. There is no tax or fee when cash is withdrawn from the bank where you have your account. However, when cash is withdrawn from another bank’s ATM a flat fee of Rs. 15 is charged, and if the individual has a habit of frequently drawing out cash from another outlet’s ATM’s, then this key factor should be kept in mind while choosing your bank. You can always choose to withdraw a larger amount to reduce the constant charge levied on you; or you can choose to swipe your debit card at outlets to reduce the amount you’re carrying.
- Bank near you.
It is a general practice among people to open an account in a bank that is near to their office or residence. Some people prefer it but it is not mandatory. There are many more benefits that need to be considered first. If the bank falls short on other benefits such as ATM network, minimum balance requirement, online services, hidden charges, fee on every service, it is better to go little further and choose a bank that is more affordable. Another thing you could consider is that when you choose a bank near your office, and you change your office, the bank may be a little out of the way for you then.
- Bank charges & fee structure.
Banks have propensity to charge for even small services such as requesting for a bank statement, pay orders, lockers, cheque books etc. Structure of fee and or bank charges may not look exorbitantly high but eat up small savings. Year-end calculations may startle you as to how much have you spent that could have been avoided choosing the right bank that has lesser charges on standard requests. Bank Charges are changed every six months to one year, and published. If you have your email address registered, the charges are usually emailed to you. Otherwise, you can always pick up the schedule of charges from your branch, or from the website.
- Online & mobile access.
This is the digital age. Banking is also transforming, now it is not necessary to visit your branch for small needs. You can evaluate online and mobile access that your choice of bank is offering. Most banks have their branches online giving customers’ complete access to make transactions across any branch, or on online access. However, banks like National Bank or Bank Al-Habib are actually not online. This means that if you perform a transaction in any other branch, other than your own, you would have to pay for regular transactions too, like cheque clearance, or even cashing a cheque!
- Loan, Advance & Trade facilities.
Nature of business will determine which bank you want to open an account with. If the intent is to open a bank account that keeps your business going smooth it is absolutely necessary to do an in-depth research beforehand regarding the kind of services you can avail. While all banks would allow you loan, advance and trade facilities, some branches may not be able to support these transactions. Therefore, choose a specific branch, based on need. As an individual, you may want to evaluate debit and credit card facilities, and the kind of cards that are offered. Compare credit cards to see which cards would be beneficial for you. Based on this, you can always choose the bank that works best for you.
Choosing a bank is not complicated, but you just need to figure out your own needs to iron out your choices!