These days, many of us are grappling with the new reality of suddenly having to pay for bank services, such as checking accounts and debit cards that used to be free. This comes as banks desperately look for new ways to make up for lost revenue.
For some customers, ditching their bank is more about principle than an extra $5 fee. For others, spending those additional dollars is exactly what it’s about.
Whatever your reason for looking to bolt, consider your options
If you still like your bank, ask for a break on the fees and you may receive some sort of concession.. Some banks may cut you slack if you switch to electronic statements and direct deposits, or pay your bills online.
If your bank says ‘no,’ you may want to take your business elsewhere. Smaller institutions, such as community banks, credit unions or online banks typically have lower operating expenses and can pass the savings on to their customers. That means lower fees and better rates.
If you go with an online bank, you may have to change some of your banking habits:
Deposits: Some online banks let you make deposits by pre-paid envelope, submitting a scanned check, or transferring money from another checking account.
ATMs: Some allow you to use any ATM location and reimburse you for the fees.
Customer service: Some are available 24/7 while others have limited hours.
Before switching, analyze your current banking habits. If you live paycheck to paycheck and are used to running to the bank where your paychecks are quickly cleared, online banking may not be a good fit.
Transferring your funds to another bank can be a nuisance
Banks competing for new customers offer assistance to ensure a smooth transfer. One nifty tool many banks and credit unions post on their websites is called a “switch kit.” It contains checklists and letter templates to help you move your money over.
This checklist is a handy reminder to:
- Switch over all automatic bill payments and direct deposits
- Open a new account
- Order your new debit card and checks
- Stop using your old accounts
- Leave enough money to clear all transactions
- List your auto payments and direct deposit, and notify them all
- Update and submit Payroll Direct Deposit
- Close your old account
Now that you’ve completed the checklist, allow at least 30 days for the dust to settle. Make sure your paycheck gets deposited into your new account and all pre-authorized payments are now coming out of your new account.
Go with an insured bank
Make sure that the Federal Deposit Insurance Corporation (FDIC) insures the financial institution you are considering. Look for the FDIC logo or go on the FDIC website (FDIC.gov) and run the institution’s name through the database.
When it comes to your money, you’re the boss. If you don’t like the changes at your current financial institution, take your money elsewhere. Switching your funds requires some research on your part, so whatever you do, don’t act impulsively. When you let emotions rule your financial decisions, you will always come up short.
Mystified by money and want to improve your financial effectiveness? Denisa Tova CFP®, CDFA, MBA is a Colorado Springs-based Certified Financial Planner and a Certified Divorce Financial Analyst. Contact her at DenisaTova.com or email denisa.tova@gazette.com.
