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An Introduction to Common Banks in North America

This article was co-authored with Bear and the Bull.

Coming to a new country is daunting. Not only is there a new culture and, in some cases, langue to adjust to, but also, an entirely different system.

While some aspects of living in a new country take some time to adapt, others are important to master quickly. Of these, arguably the most critical is the banking system. Without a bank account, you will face difficulties finding housing, getting paid, and growing your wealth in your new home.


But with so many options - how do you get started?

That’s why we’ve created this series to help you navigate the banking system in the US and Canada. We’re going to cover some of the basic questions you may have as a newcomer, and help you avoid traps that can set you back on your financial journey.

North America has many financial institutions. These include: traditional and online banks, credit unions, and various lenders. All offer different services, and charge different fees depending on the product. When choosing a bank, it is important to understand your current and future financial habits and needs. Answering these questions will help you determine the type of bank you are better off with.


Here we have outlined the 3 main types of banking institutions that you’ll have.

Traditional banks offer a wide range of services, and most have similar fee structures. Large banks have several benefits: they offer a “one-stop-shop” for all of your needs, usually have lots of branches, and many ATMs. Some people might want to start investing and take advantage of reduced fees from consolidated assets. In North America, online banking is commonplace and secure. Let this give you a peace of mind if this was not your experience in your home country.


Online banks are similar to the traditional banks; however, they do not have any physical branches. They typically offer the same set of products, but all of your customer service will be virtual. The fee structure for online banks and interest rates are more competitive, because the cost savings from not paying rent, electricity, etc for a large building are transferred to you, the consumer.

Note: traditional banks offer online banking as well.


Credit unions are non-for-profit, member-owned institutions. Their mission is to keep service rates low, offer competitive interest rates on saving accounts, and set interest rates low on loans when possible. Credit unions often require you to apply, or for you to be vetted through a “field of membership.” Eligibility criteria includes where you work, live, and affiliation with other groups. While credit unions offer competitive rates, they tend to offer a smaller range of products. However, if you’re seeking a deeper one-on-one client experience and qualify for membership, credit unions may be a great option for you.


Now that you know the three major types of banking institutions in North America, here’s a quick set of factors to help you decide which one is best for you.


1.Banking Habits:

  • Are you looking for a bank that offers a comprehensive suite of products - mortgage lending, student loans, wealth planning - or are you looking for a place to simply keep your cash?

  • Depending on the types of services you’re looking for, different financial institutions will become more attractive to you.

2. Location:

  • Some banks have a stronger regional presence than others.

  • For example, I grew up banking with PNC Bank, which has many branches in New York, Pennsylvania, and New Jersey. However, when I relocated to California, I realized that there were 0 - yes, ZERO - branches on the west coast. Fortunately this was not an obstacle for me, however, if you travel frequently, you may want to consider a bank that has a strong national presence, or that can accommodate your needs in other ways.

3.Fees:

  • The devil is in the details, as the saying goes, and this is really where the differences start to appear.

  • Pay attention to fees for things like overdraft, penalties for withdrawing too often, etc - they can really add up!

4.ATM Usage:

  • Just like locations, different banks offer different levels of ATM coverage. The good news is that these days, many banks offer ATM fee reimbursement - if constantly keeping track of ATM locations is daunting to you, make sure you check that this feature is available!

5.Customer Service:

  • Do you value face-to-face interaction, or do you prefer chatting via e-mail or telephone? If it’s the former, a “traditional” bank with many branches may be a great option for you. If you’re more of the latter, then consider an online bank.

6.Online Banking Options:

  • These days, online banking is the status quo. All of the major players in Canada and the US offer compelling online banking solutions - however, some provide more innovative features than others. If this is important to you, be sure to do your research.

7.Interest Rates:

  • This is critical! Especially in the low-interest rate environment that we currently find ourselves in, the difference between a savings account yielding 0.7% and 0.9% can be profound. All else being equal, try to choose the financial institution that offers the most attractive interest rates.


We hope this has helped you!


It’s important to understand your banking habits and expectations of the financial institutions. Also, do not forget to research the institution online!


Quick tip, we love to read online reviews and experiences from current and past clients. Tools like Nerdwallet, the Balance, and the Skimm offer excellent product and bank comparisons!

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© 2020 Victoria Ko