Finding a new bank is often a dreaded task for many consumers simply because the amount of change this switch can bring into one’s financial life. With banking being automatically connected to many things consumers use frequently, it can get pretty complicated to integrate a new bank account into your existing financial arena. Because of these complications, many consumers choose to stay with their current bank despite high costs and hassles so they won’t have to face the challenge of changing banks.
There is a lot of competition in the banking industry. Coupled with the many changes in banking regulations in the last year, banks are doing a lot to hang on to their customers while still working to connect with new clientele. The result is a lot of confusion among consumers about where best to do their banking.
If you are not paying attention, you may be paying too much for the banking services you currently use. The laws have changed the way banks can do business, and in order to keep profits growing, banks are now charging more for services. If you are not keeping up with the changes in your bank, your finances can suffer.
Consider how often you read your monthly bank statements and match it up with your checkbook. Many people bank online and often bypass the reconciliation aspects of financial management, meaning charges for services may be increased without the customer being aware. The same is true with the notices banks send out about service charge increases. Customers often will not even open the mail containing these notices, let alone read them. In order to maintain a bank account you can actually afford, you should be reading all disclosures and asking questions about fees you don’t understand.
There are some things you can do to make the process of finding a new bank and moving your money a lot smoother. Here are five steps to help you sort through the issues:
1. Know What You Have. As mentioned, avoiding the account statements and bank disclosures you receive will not be to your advantage. You need to know what services you have available to you from your current bank, as well as how much you are paying for these services, before you can make any financially-wise decisions. Sit down with statements and your other account information to see where you stand. If you are confused about any recent changes the bank has instituted, you should speak with the manager of your bank if possible so you are clear about the services you use and their expense to you.
2. Start Your Research. You should already be keeping an eye on the competition to know where to find better rates and the most cost-effective services. If you do not know what else is out there, it is important to start doing some research about interest rates, available services, and costs for other brick-and-mortar banks, online banks, and credit unions in your area or on a national level. Compare the services and costs of services you already use and discover what other banking options are out there that would be beneficial to you financially. Keep notes and use online comparison tools to find a bank that may be more suitable for your specific needs.
3. Schedule a Negotiation. Banks are vying to keep their current customers in light of the many changes and regulations affecting the banking industry. In many cases, you can successfully negotiate a better deal with your current bank so you can avoid the task of changing accounts altogether. Schedule an in-person meeting with the manager of your local branch or contact a representative by phone that has the power to negotiate with you. Go to the meeting prepared with what you are getting versus what else is out there in order to make your case to the manager. Many times the negotiation will be successful if the manager feels you are willing to leave the bank for good. They may or may not offer to give you what you ask for, but you’ll never know until you try.
4. Interview Other Institutions. Before signing up at the next bank or credit union that appears to offer a better deal, make sure to get a feel for the overall company before committing. You want to ensure that customer service is helpful, available, and easy to reach. Speak with their phone representatives about any questions you have and see how they handle the answers. If your gut feeling is the company will be hard to work with, keep looking. Despite all the technology, there still needs to be some personal connection in banking, especially if problems arise.
5. Plan Out the Switch. If your current bank is unwilling to accommodate your negotiations and you’ll be transferring your accounts elsewhere, don’t do it until you are prepared. Make a list of all the activity on your current accounts that will need to be changed such as automatic deposits and withdrawals such as bill pay services. You never want to close an account until you have established the new accounts and are assured everything has cleared. In fact, many banks already have protocol about closing out old accounts to ensure everything is in order. Know the rules so your transferring of accounts will not become a nightmare. Contact anyone that uses your current bank account and advise them of the changes including your employer, your creditors, and any other entity that requires your bank account information.
The more prepared you are for a change in banks, the better the process will go for you. If you do not plan out the process ahead of time, you will likely get to a point where you can’t even access your own money and wil find yourself in trouble with creditors, late bill payments, or missed payroll deposits.
Debbie Dragon is a contributor to MyBankTracker.com, where she writes about personal finance, taxes, and banking.