Personal Finance

Want to Switch Banks? Here’s How to Do It.

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Maybe Your Current Bank Isn’t That Bad?

Kaplan does offer some questions you may want to ask yourself before making a switch: Are its branches and ATMs conveniently located?

“Before people actually switch institutions, they should do some shopping within their own bank first,” Kaplan says. “Banks have several different types of accounts to choose from, so there may be a product you’re not aware of to better serve your needs.”

[Article: Spending Up, Disposable Income Down]

How Angry Are You?

If you’re angry about the considerable lobbying sway the large banks wield in Washington, then details like whether you can make deposits using cell phone photos of your checks may not matter. According to Schwanhausser, anger over fees is always a big reason why people choose to switch banks, second only to relocation to a different part of the country.

“A lot of it has to do with the arrogance of the big banks,” Sherry says. “They don’t have the sense to serve customers anymore.”

Where Should I Go?

Once you decide to switch banks, a slew of decisions confronts you. Should you go with a traditional bricks-and-mortar bank, or one that operates only online? How do you compare offers?

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Here are a few tips for this second phase of the process:

How Do I Shop for a Bank?

Finding a smaller bank or credit union near you is surprisingly easy. The “Move Your Money” campaign, founded by Arianna Huffington and Dennis Santiago, co-founder and CEO of Institutional Risk Analytics, a bank risk ratings company, created a great online tool that helps people search for small-ish institutions near their home. Just type in your zip code, say whether you want to search for banks, credit unions or both, and off you go. Their tool is here.

Another handy tool is offered by the National Credit Union Association, here.

What Features Are Most Important to Me?

Smaller banks and credit unions don’t have as many branches and ATMs as behemoths like Bank of America, and they may not have all the mobile banking services that some customers have come to enjoy, says Keefe.

On the other hand, about 3,000 credit unions have joined together to offer a network of 28,000 ATMs nationwide, including machines located in Walgreens and 7-11 stores.

“Credit unions are leveraging their cooperative way of doing things so they can match big banks,” Keefe says.

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Making the Switch »

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  • Roger

    Good article. One thing many people fail to do is leverage their total bank relationship. Banks consider the mortgage balance you carry with them an asset; therefore, they’ll likely waive checking account fees etc. So if you have a mortgage at wells, citi, chase, etc. and are looking to switch checking accounts, be sure to check out what your mortgage lender has to offer on a checking account. If your mortgage and your checking acct are at the same bank, and you’re being charged bank fees, call to be sure the accounts are “linked”.

    If you have a bunch of excess cash sitting at the bank, you may want to move the savings balance to online places like ING, HSBC, CapitalOne, etc. that tend to pay much higher interest rates on savings (since they don’t have the same brick & mortar costs to pass along to you). My opinion, though I’m not an expert.

    Great article Mr. Maag, interesting stuff!

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