Changing from a National Bank to a Local Bank or Credit Union

Many people are making the decision to leave the large national banks. Opening checking and savings accounts in local banks and credit unions can lead to savings. Frustrated with, or fed up with the practices of large national banks, people are looking for friendlier banks and lending institutions that appreciate customers.

Changing Banking

Even though the federal government stepped in to regulate exorbitant overdraft fees and other fees, the larger national banks continue to increase fees on services in other places. ATM debit card purchases have now begun to cost, whereas in the past these services were free. Extra fees on wire transfers and monthly service charges are occurring on a regular basis.

Some large banks have completely stopped making Federal 941 tax deposits for their business customers. Small business loans are almost impossible to obtain.

Many banks have changed their policies regarding overdraft fees on ATM purchases (the card is no longer honored if the cash is not available) because the Feds have regulated the practice. But, the practice of dropping finance charges onto a credit card continues, before payment due dates, causing over-the-limit fees to apply in many instances. Or, having to pay $3.75 to $5.00 to withdraw one's own cash from an ATM machine is unnerving.

Why Stay?

Many of the reasons people stay with their current banking is not the right reasons.

Automated payments - Reluctant to deal with the issue of automatic payment withdrawals, people hesitate to switch banks.

Branch Service - Having a "brick-and-mortar building" to go physically to the bank and cash a check is important to many people.

ATM fees - A local ATM may be of concern, if you use ATMs frequently. Online banks and larger national banks have arrangements with other banks to allow customers ATM service, thus the ability to use the card world-wide. Local ATMs may be limited.

Changing Banks Made Easy

There are simple steps to switching banking and financial services.

First - locate a new bank. Ask friends and family if they are satisfied with their bank. Current customers have the information on what a bank is really like. How long are the lines at lunchtime? Do they have user-friendly online banking? How many accessible ATMs? Are the ATMs free or even pay you to use the card?

Consider local banks and credit unions. These smaller financial institutions offer great service and competitive rates. Consider some of the best online banks. They typically offer the highest interest rates and even free checking accounts.

Second - Open the new bank account. Open the new account before closing the old one. Resist the temptation of closing the first account out of anger. Get your new debit card and checks ordered. The new account needs to be fully in place are ready to go.

Third - Set up any direct deposits. The new bank should be eager to help you set up any direct deposits. All you need is the routing number and your account number, both of which appears on your new checks.

Fourth - Switch automatic payments. This process may take a little time. Be sure to keep the old account open until all transfers have hit the new account, and keep enough money in the old account to cover these payments until you have made the switch successfully.

Fifth - Close the old account. Once all withdrawals have cleared and automatic payments are successfully withdrawn from the new, go to the old bank and close the account.

Often, Local banks and credit unions offer incentives to open accounts. Some offer higher savings interest rates or some offer "gifts" for opening new accounts. Banks have found that gift offers spur spontaneous decisions by customers. They take advantage of the idea of offering the new client an iPod, cooking utensils like outdoor grills, and other items of interest to the public. When banking institutions begin to get back on their feet, changing to a local bank or credit union will really be saving money.