You may have met someone who says they don’t trust banks and shoves their money under a mattress. You write them off and go on using your debit cards and checking accounts. Then something like Wells Fargo happens and suddenly, mattressing your money doesn’t seem like such a bad idea.


Despite our fears, banks serve us pretty well for the most part. Our money is there when we need to pay rent. We can transfer our cash whenever we want. The system works well for day-to-day transactions, but that doesn’t mean banks are entirely trustworthy. A lot of customers learned that during the banking collapse of 2008, when banks suffered few consequences for shady business practices. This recent news from Wells Fargo is a disconcerting reminder that banks can do sneaky, illegal things with your personal information, or worse, your money. It’s never been easy to trust a bank, but these days it seems impossible. So how do you pick one that’s actually trustworthy? Here are a few options.




What Your Bank Should Offer, at the Very Least

At the very least, your bank should be FDIC-insured. Credit unions are insured, too, but not by the FDIC. Instead, deposits are insured by the National Credit Union Administration (NCUA). This means, in the event of a bank failure, the Federal Deposit Insurance Corporation (FDIC) or NCUA will make sure your money is almost certainly safe. Big banks are typically FDIC-insured, but you can check a bank’s status here and a credit union’s NCUA status here.



Make sure your bank offers online security and fraud protection, too. Your bank should use two-factor authentication, which makes you go through an extra step to verify your identity. They should also encrypt your transactions, meaning they code your info to prevent hackers from accessing it. Some banks offer 256-bit encryption but at the very least they should offer 128-bit encryption.


A good bank also has some kind of fraud protection. Here’s Ally Bank’s policy, for example:

At Ally Bank (Member FDIC), we guarantee that you will not be liable for any unauthorized Online or Mobile Banking transaction as long as you report the unauthorized transaction by calling us at 1-877-247-2559 within 60 days from when your statement is made available.


Most standard banks are pretty good about incorporating these three basic protections. These aren’t bonus features, though—they’re a must for any bank account. We know that even with these protections in place, your bank can still screw you over, or be screwed over by a hacker or data breach.

Research the Bank’s Reputation


The FDIC actually offers quite a bit of detail about your bank. You can check their Institution Directory and Call & Thrift Financial Reports for details on a bank’s taxes, assets, and expenses. If not completely voyeuristic, this information is useful if you know what you’re looking for. In general, though, you just want to know what other customers have to say about a bank.



That’s where the Consumer Financial Protection Bureau (CFPB) comes in. (They’re also the entity responsible for fining Wells Fargo $100 million). They have an entire database of consumer complaints and you can sort by various details, including account type, date, and company. Click on the “Company” tab to sort accordingly, then scroll down and find your specific bank. The tool will show you complaints lodged against that bank over the years.


They also keep track of consumer “narratives.” Some consumers tell the CFPB they want to share their complaint descriptions so others can learn from their experience, and you can find those descriptions in detail here. Here’s one about Wells Fargo, for example, that seems to sum up their recent scandal pretty well:


You can research details on credit unions, too, of course. The NCUA has their own database that offers detail on the credit union’s status, number of members, and assets.

Sometimes news outlets and other organizations will rank banks and credit unions, too, according to customer satisfaction. Customer satisfaction doesn’t guarantee a bank’s trustworthiness, but it doesn’t hurt to be informed.




Use a Credit Union Instead


The Wells Fargo scandal happened because employees were trying to meet sales quota. Wells Fargo is, after all, a big company that’s in it to make profit. Like any other company, they have sales goals. Unlike a bank, a credit union is a not for-profit.



Five Best Credit Unions If you're looking for a better place to put your money, a credit union is a good option over a… Read more


Credit unions don’t have customers; they have members. We’ve told you about the differences between banks and credit unions before, but Dallys Bergl of the Inova federal credit union sums it up pretty well:

If you have an account with a credit union, you are a member and an owner... As a member/owner, you have the right to both vote and run for the Board of Directors. You get only one vote regardless of how much money you have at the credit union and all of our directors are volunteers and receive no compensation for their service. This process guarantees that your credit union is looking out for your financial interests and not that of a small group of stockholders.


Granted, Bergl is the president of a credit union, so his opinion might not be 100% objective, but our readers are big fans of them, too. Generally, most credit union members only have awesome things to say about them. You can hardly say the same for bank customers.


Credit unions also typically have better interest rates and fewer fees. Many of them are member-only, though, and some of them might not have the same conveniences as banks. The good news is many of these annoyances are easy to work around.


Diversify, Don’t Rely on One Account


Even with customer reviews, though, it’s hard to predict where a bank is headed. All it takes is one bad executive to screw over a bunch of people. The truth is, while it’s generally pretty safe to store your money in a U.S. bank, there’s no guarantee you won’t run into another Wells Fargo situation.



Over at Quora, one Certified Financial Planner suggests a simple solution: diversify.

The problem is, there just aren’t any truly, 100 % safe places to save wealth. So instead of putting all of it in the bank, try placing it around in stock brokerages, some in savings banks, some invested in real estate, and some working for you in your own business. That’s probably the safest way to save money... and ensure that at least part of it is going to be there when you need it.


Obviously, this is prudent advice when it comes to investing, but this is still good advice even if you don’t have $100,000 to diversify. You may feel unsafe storing all of your cash in a single bank, and in that case, you might diversify. For example, if you have a checking account at Chase, you might keep a small savings cushion there, too, just for overdraft protection, but then keep the rest of your savings at, say, Ally. It might be overkill, considering Wells Fargo customers didn’t exactly lose all their savings, but if you really don’t trust banks, keep your money separated in a couple of banks you trust the most.




What to Do If Your Bank Screws You Over


Again, it’s hard to guarantee your bank won’t mess up in some way. If they do, you can file a complaint with the Consumer Financial Protection Bureau (CFPB), whether it’s about a mortgage, a savings account, a credit card, or any other financial product. The CFPB will add your complaint to their database and work to find similar problems with your financial institution. If they find a pattern of complaints, they might investigate further.



They also report the complaint to the financial institution, which gives them a chance to contact you in an attempt to solve the problem.


People are becoming increasingly suspicious of big banks, and with this latest news, it’s not hard to understand why. However, the good news is there are resources available designed to give consumers a little more power. If nothing else, this might be a good reminder to switch to a better bank—or a credit union.

Illustration by: Sam Woolley; photos: brauerranch, Dennis Danen, Mike Mozart, Matt Lucht, Tax Credits