Over the last decade the banking landscape has changed drastically. However, for many of us our bank of choice has not. With banking we develop a type of brand attachment. Banks know you will probably stay with them for a long time so they work aggressively to get your business, but not always as aggressively to keep your banking business. Typically, we think of a bank like an old friend or a cuddly blanket. The prospect of getting out and looking around makes us feel like we are betraying someone we love. Nevertheless, since there are hundreds of banks (on every street corner) if your bank is failing to meet your expectation, don’t stick with them – get out and find a bank that will surpass your expectations. One of the habits of the financially fit is to organize your finances. Getting your banking straight is an important part of the organizing process.
Ten Reasons to Consider Changing Banks?
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Fees
If you are paying fees for customary banking services you need consider changing banks. I once banked with Wachovia and they charged me a fee to download my transactions to Quicken. At my first available opportunity, I closed the account. There are too many banks for me to stick with someone who makes me afraid to use the bank because they might tack on some creative fee. If you want to charge me money to use your bank I walk away!
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Location
Perhaps you chose a bank because it was the closest to your house, but in the meantime either you have moved or it has moved. My local bank moved last year and I am still wondering why I make the extra drive to do my banking. Time to get motivated to make the change.
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Savings account with consistently below market rates
If your savings rate is less than 1%, you are lagging the market. Check out www.bankrate.com to see what the current market is offering for savings interest rates. Currently my ING savings account is paying 1.36% and I could find a rate as good as 1.80%, but that small difference is not worth the change. I know that ING will continue to offer competitive rates in any market.
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No interest rate offered for a checking account
If you have a checking account and you are not getting any interest, there are many banks that will offer you interest for that service. Truth is, you will never get rich from the interest on a checking account, but just the principle of getting nothing when you could get something does not make sense. ING Checking is offering me .25%, and my credit union .10%, but it is better than nothing! Besides, when interest rates increase, my 1.75% is going to start looking much better than 0%.
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ATM fees
If you have paid a penny in ATM fees in the last year you should look around as there are many banks that offer you free nationwide ATM usage within a network. With ING Checking I have access to thousands of ATMs nationwide. Over the last several months I made withdrawals from California, Wyoming, Nebraska, New York, and Texas, and I did not pay a single penny for ATM fees. When I travel overseas I make fee-free withdrawals through my credit union. I have withdrawn money from Australia, Japan, New Zealand and Canada without paying a fee.
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Monthly account fees
Can you tell I have bank-fee-itis? With so many banking alternatives, if they want to charge you for customary banking services WALK AWAY. There is no reason why you should be paying a bank for them to hold your money. If you are, it is time to start shopping around.
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Poor customer service
If you feel like you are being treated like your business does not matter, get shopping. Go and find someone who really wants your business. There is a misconception that banks with higher fees have better customer service – wrong. Usually large banks have worse customer service because their bank policies and procedures are so ingrained they do not know how to deal with a unique banking situation.
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Promotion at competing bank
If you have been considering a change, banks often offer promotions to join. That promotion might just be the motivation you need. For example, I have received anywhere from $75 to hotel points for signing up for a new bank. If you are going to make a switch, you may as well do it in as lucrative a way as possible.
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The financial condition of the bank
While almost all banks are FDIC insured if you are worried about your bank’s financial status then go ahead and switch. I have had an account at a bank that filed bankruptcy. The result was that my account was frozen for several nervous days and then there was a lot of hassle involved. In my case, the hassle was minimized because all accounts were moved to ING Direct where I already banked.
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Extra perks (without extra charges)
Different banks have perks that they offer to their customers. Something like free checks or free notary services might not be THE reason to switch, but combined with these factors it might just tip the balance in favor of switching.
ING Direct: My Bank Of Choice
My solution to all of these has been an ING Direct Savings and ING Direct checking account. I have banked with ING since 2004 and I have not paid a single penny in fees. In addition, recently (in July) there have been changes and improvements to the ING Electric Orange account that add some extra perks like convenient bill pay and electronic statement storage in one location online. Here are some of the other benefits:
- No fees (for customary banking activities)
- The location never changes even when my address does.
- Competitive saving and checking interest rates
- No ATM fees (within network)
- No monthly account fees
- Great customer service
- Promotion for joining
- Some great extra services like free checks mailed and free people to people electric transfers
If you wish to sign up for an ING account and take advantage of their promotion, send an email to mhforc [at] gmail.com. Include your name and account preference (savings or checking). I will refer you. If you deposit at least $250 you will get a $25.00 promotion.
Photo by Burning Image.
What other reasons are there to switch banks?
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Great article. I love people having options and not feeling as if they are stuck with just one thing.
Cheapskate Sandy´s last blog ..Carnival of Personal Finance Planning Winter Edition Feature
Ultimately, I did decide to open an ING Bank account. It seemed like a no-brainer to me.
Through the site saveing.ca, I received the bonus $25 to open my account. The $25 bonus posted to my account right away (NOTE: this $25 is not available for withdrawal for 30 days though — if that is important to you). The initial transfer from my brick and mortar bank to my new ING Bank account was received within 48 hours.
So now I am all set to start earning the 1.05% interest rate. I plan on using my new ING Bank account as my emergency fund… those funds that won’t be touched unless I absolutely, positively need to. It will be nice for my savings to earn a higher interest rate vs. previously languishing in the < 1% range.
Don’t forget credit unions. They often provide better rates and service with lower fees than banks, especially the mega-banks.
Ken, I agree. My brick and mortar bank is a credit union. I like the service much better.