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Why You Might Want to Stay With Your Bank

Why You Might Want to Stay With Your Bank

Big banks have taken a beating lately, with Bank Transfer Day and the fever-pitch mood of switch, switch, switch. According to a recent study by management consulting firm cg42, consumer furor over fees could mean a loss of $185 billion to big bank coffers over the next 12 months.

People are fed up, jumping to credit unions and smaller banks. Should you do the same? When does it pay to stay put? There are a few factors to take into consideration before voting with your feet.

Are you ready to take on the hassle of switching?

You will have to open a new account, order new checks and debit card, set up electronic transfers between your old and new account, set up online banking and online bill pay, move automatic recurring payments from your old to your new account, move direct deposits to your new account, and more. You’ll need to be careful too, that all your checks have cleared from your old account. You might get dinged for a monthly maintenance fee when your old account drops to below the required minimum as you’re winding down the account. Switching is not onerous, but it’s not exactly painless either.

Can the marriage be saved?

Are you happy? Since fees seem to be the primary cause of divorce, take a look at all the fees you’re charged – from debit, monthly maintenance, online banking and any number of things. Don’t guess. Pull up statements for the last 6-12 months, and see if you can find out what competitors charge for similar accounts. If your banking fees aren’t keeping you awake at night, there’s probably little reason to run off. Know that while some smaller banks may have lower or no fees, there may a good reason for that; they may be offering less in terms of products and services. While double digit interest rates are not to be had on traditional savings accounts anywhere, if your bank’s interest rates are not significantly lower than the competition, it earns points for that too.

Is your bank accessible and does it have a good network of ATMs?

This may be important enough to sway you decide to stay put. If competitors don’t have much in the way of branches, and ATMs, and you are frequent ATM visitor, this counts. You don’t want to waste money paying “foreign” fees when using other institutions ATMs because the bank’s offering is sparse. You’re especially doing well, if your bank reimburses you as much as $20 in fees, or up to six ATM transaction per month, if you use a foreign ATM.

Is your institution tech savvy?

Do you have the suite of technological wonders available to you -- account alerts, online account transfer, digital deposits and other more modern conveniences than you can probably take advantage of? If yes, you have it good.

Are you treated with love?

Does it seem like the staff believes that motto, “the customer is always right,” perhaps they even “know you” -- that matters too. A personal relationship especially is important if at some point you might need a loan.

Is loyalty rewarded?

Some banks reward customers with benefits for multiple or ongoing relationships. Does yours?

Are you on the same page?

Increasingly people want to do business with a company that has values that align with theirs. Do you care what kind of corporate citizen your institution is? How do they measure up on the corporate responsibility stick? If you’re concerned about environmental issues, princely compensation packages for management and your bank belongs in the hall of shame, that may make a difference? But, if you mostly see the world from a similar point of view, score one more for your current bank.

Do your analysis and decide. If your bank doesn’t measure up, despite a bit of work, switching may well be worth it. With banks under pressure, there is an opportunity to shop around and perhaps find a better deal. But if your current bank is best, ignore the urge to follow the crowd, stay put.

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Anonymous | | Comment #1
Many visitors to this site are rate chasers and don't mind the "hassle" of switching for a better rate. It has turned into some sort of hobby for me. However, I do find it interesting to read why many people rationalize staying with their banks that care little about them.
Anonymous | | Comment #2
The only rate chasing that I do is for 5 year CD rates. Hasn't been anything worth chasing for some time now and not for the foreseeable future, unfortunately. I never figured rate chasing was worth the hassle for regular savings and checking accounts.
etibem | | Comment #3
excellent article m s nash hope you become a regular
Dale | | Comment #4
Wells Fargo starting charging me a monthly fee for them to provide a copy of my checks monthly. The only problem was, I was not notified that this fee was coming. I called W.F. customer service and explained that I was not happy with this fee and was not notified about it. They assured me that somewhere in the monthly statements (buried) there was an announcement this change was coming unless I decided to not receive the paper check return. I then ask why I’m being charged for this service since I had not written a check in 9 months. The phone agent did not have a good answer but suggested that I opt out of the paper check return. I told the agent to go ahead and opt me out.

The next month I was charged again for this check return fee. I called W.F. customer service again and question the fee. The agent look over my account and advised that he did see that the check return service was cancelled and should have stopped charging me the fee. He then put me on hold for about 5 minutes and came back and said he found out what had happened. He stated that once you cancel this feature, it takes 60 to 90 days to be processed in their system. Sounds fishy to me. I think its time to start checking out some local credit unions.

Anonymous | | Comment #5
the "hassle" of switching was a blessing in disguise when we left citi for a credit union. it gave us a chance to review where all our payments where going and from which accounts. yes, it was a hassle, but it did force us to take a good look our expenses -- something that we kind of let ride because everything was set up.

i don't really see any reason to stay with a big bank at this point. most all credit unions are part of the coop network, so atm access has been a lot better for us because of this. and the credit union has treated me a lot better than citi did. unless there's a better rason than "because it's a hassle", i'd say jump ship and go to a credit union.
Anonymous | | Comment #6
And I say, unless there is a better or more compelling reason other than rate chasing, it is not worth the "hassle".
51hh | | Comment #7
Profit (i.e., interest) is the only cuase, the rest doesn't mean much to me:D
Anonymous | | Comment #11
the big banks stink and should be allowed to fail but they have too much power in Washington. They do try to create "sticky" customers with online banking and electronic transactions so that those customers are more likely to endure outrageous fees so they don't have to go through the time limited hassle of switching accounts
mschoenf | | Comment #12
another reason to stay is if you are at a bank for a long time and have an established history of good account ownership, you will not recieve holds on checks as your would at a new bank. At BofA, I had a large check that I deposited a while ago that the manager approved for immediate funds availablitiy as I've had my account there for 20 years (not at this branch; the manager did not know me from Adam). This is not important very often, but might be very important at a critical tranactions like a home purchase or some other big event.
Anonymous | | Comment #13
It's simple.

If your bank charges a fee, dispute it.

Ask for a credit.

Switch to a bank that does not fee you to death.

I found a rewards checking that pays 4.09% on the first $10k with 12 debits, 1 billpay or ach deposit & monthly e statements.

Very happy with that.

If you do a little homework, there are a number of relatively higher return accounts with few or no restrictions &/or fees.

Drop any bank that does not show appreciation for your business.
Anonymous | | Comment #14
I have never been charged a fee for anything at my bank. It is according to whether you are a Premier member or not. However someone brought up an issue which has always concerned me. If one has a CD with another bank and it matures and you want to use it to purchase another CD with a different bank, is it best to just take that check and endorse it over to the new bank or put it in your checking account and write out the amount on your own personal check?.

My bank says it can't tell me how long there would be for the "hold" on the other bank's check until it is deposited and my check could bounce if I try to use the amount before it clears. Can anyone share what they usually do in these situations? Thanks!
emdtech | | Comment #15
I find Sherly’s article interesting in more than one way….

Ken has accepted Ad money from the various B&M banks on his website as a source of income. So, he walks a fine line between touting the virtues of credit unions (which I am sure they have taken a small “bite” out of the B&M banks) and being too negative with the B&M banks. Therefore, we now have the “you may want to stay put” message delivered by his website team.

I am not saying Ken has “sold out” or succumbed to any pressure, but I am seeing a change in his tenor. Must we forget who had gotten us into the financial mess in the first place?

The recent 60 minutes program last Sunday illustrates the illusion that “justice will prevail in the long run” – not with the banks. No one to date has served time for the recent collapse that occurred September 2009. I personally doubt anyone will be prosecuted for the housing crisis as well. I find this quite ironic.

Anonymoussteve | | Comment #16
yeah i swiched from bac to a credit union -getting a decent yield - big banks suck