If there's anything we've learned from the recent scandal at Wells Fargo (NYSE: WFC), where thousands of employees defrauded potentially millions of customers, it's that consumers should pick banks carefully.
In this clip fromIndustry Focus: Financials, two Motley Fool analysts discuss the things that consumers should look for in great banks for consumers, including low account fees, competitive interest rates, FDIC insurance, and quality customer support.
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A full transcript follows the video.
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This podcast was recorded on Sept. 19, 2016.
Gaby Lapera: Let's move on to things thatconsumers should look for when they open a bank account. Low fees. You shouldfind out what all the fees areon everything before you open anything.
John Maxfield:Yeah,whatever it is. Annual fees, overdraft fees, insufficient funds fees. If you're a consumer,that's where the bank is making money off of you. If you can attack the fees,from a consumer's perspective, that'sgoing to get you three-quarters of the way along to where you want to be in terms of picking a good bank.
Lapera:This seemskind of obvious, but maybe people haven't thought about this --FDIC insured. Your bank should be FDIC insured. If it's not FDIC insured, you're probably not at a bank,and you have given your money to a charlatan.(laughs) Get it back ASAP.
Maxfield:Yeah, stop listening right now and go change banks.
Lapera:Savings accounts or, really, any accounts that are not credit cards or mortgages, anywhere where you're parking your money,you want to look for accounts that have a high interest ratesso you get a lot more return on it. I think most big banks average an interest rate of 0.1-0.15% on savings accounts, I believe. Which is pretty gosh darn low,especially when you realize that there areother alternatives,which we'll discuss shortly,like internet banks or credit unions that do have higher interest rates. (phone ringtone)
Maxfield:What was that?
Lapera:Sorry. I feel like I've been transported back to my classroomin the University of Nebraska, andI'm looking at a student going, "Do you want to share with the class?" I wasdefinitely one of those TAs.(laughs) Another thing you want to look for is good customer support. That canmakes a huge difference.
Maxfield:Yeah, that's right. And,in that customer support,there's a number of different waysyou can measure that. If you call the call center,how quickly do the answer the calls,how friendly are the people that help you,do they actually help?
Lapera:Do theyactually solve your issue? This is huge. AndI guess there's no way to really know thatuntil you have an issue.
Maxfield:You can always go out and look. There arecompanies... J.D. Power and Associates... that go out and do customer scores of banks. Soyou can get a sense for it there. Or you can go toYelpand read reviews about banks. There are places you can get data that shine a light on it. But, to your point, you don't really know for sure what that'sgoing to look like until you're thereand you have to confront a problem.
Gaby Lapera has no position in any stocks mentioned. John Maxfield owns shares of Wells Fargo. The Motley Fool owns shares of and recommends Wells Fargo. The Motley Fool has the following options: short October 2016 $50 calls on Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.