Thinking About Switching Banks? Things to Consider Before Moving Your Account

So you are mad at your current bank, or just decided to open a new account somewhere? Watch out that your transactions don't get lost in limbo! There may be more to consider when thinking about switching than you'd realized... First, take a deep breath, and decide if it's even worth it to go through the hassle.

Why do you want to leave your current bank? If you're upset about fees, look closely at what the new bank charges for various things, such as overdrafts, before you switch. Are you upset with a particular employee at your bank? Again, take a deep breath. Is it really worth switching everything over because one person made you mad? Ask to speak to that person's supervisor. See what you can work out. Many times, banks will even refund fees, or go out of their way to make you happy if you are mad enough to take your business elsewhere!

Compare your options. Check with all the banks in your area, and the local credit unions. Most times, if you are eligible to join a credit union, the services and fees you will receive there will be far better than a bank. If a credit union is not available, though, grab a checking account brochure from the local banks. Look over what they offer:

*Do they have a free checking account? Even better, a checking account that pays interest?
*What do they charge for debit cards?
*Does the account have a minimum balance?
*Does the bank offer any sort of overdraft protection program? What charges are associated with the overdraft program?

In other words, what "hidden fees" are there? As the saying goes, jumping out of one frying pan into the fryer causes nothing but more frustration, especially if you're leaving your current bank because of the charges and fees. Also to keep in mind...how long have you been with your current bank? If you ever need a loan account, or any favor at all from your bank or financial institution, many times they are much more willing to help if you're a client who has been with the bank for a long time. Building up loyalty and a longstanding account helps clients when a bank is on the fence about making a decision, whether the decision is to reverse a fee or approve a loan.

That being said, keep in mind that banks and credit unions are going to charge fees. That's how they exist. They are entitled to charge you for certain services that they offer, including stop payments, and information given out over the telephone. Most banks today have an 800 number that you can call for free. For those clients who call the branch for information, many banks charge now. The reason for this is that the phone calls in the branch take time for the tellers to answer, while their actual job is to wait on the clients who are in the bank lobby.

(Remember the last time you were in a bank, and got frustrated with the teller who was on the phone, and not cashing your check? She was probably telling another client what their balance was and what checks had cleared, which is information that client could have received from an automated system.)

If it is really worth your time and energy to switch banks, here are a few things to remember. If you have your paycheck directly deposited into your checking account, be SURE that you contact your payroll company and give them your new account information. In fact, you need to keep your current account open for long enough to make sure that your payroll check goes into the new account. That is one thing that does NOT need to get lost in translation somewhere!

Second, make sure that all the checks you have written off of your old bank actually do clear-or are paid by the bank. If the account is closed before all the checks come in, you may face returned check fees by the merchants you wrote the checks to. Those fees add up in a hurry, and will definitely make you regret your decision to switch banks! If necessary, leave the old account open for long enough to make sure those checks come through.

Next, look at your statement and see what payments are coming out of your account electronically (not with a check). Each of these companies will also need to be contacted to verify that they have your new account information. Otherwise, when those payments are run the following month...you guessed it...they'll bounce. Once again, this may result in returned fees again.

Once you have your account information switched with all the necessary companies, you can breathe a bit easier. The hard part is behind you now, at least. Now we come to online banking and bill pay services. Did you use online banking or bill pay with your previous bank? If so, you will need to set that up now with your new bank. Online banking is usually relatively easy to get onto. With bill pay, though, you will have to re-enter all the new payees into the system.

Depending on how many bills you have going out each month, this could be finished in a few minutes, or could really take a while.

After all this is said and done, there's still that matter of actually accessing your money. A debit card and checks...a new debit card will be mailed to you, meaning you probably won't even see that for a week to ten days. Checks are usually the same amount of time. Not to mention that many banks charge you for checks nowadays, so that's a given fee that you'll be faced with at the new bank.

Whew. That's a lot of stuff to think about. Switching banks can be a hassle, but for a good deal, sometimes it is worth it. If you're in a checking account that has a monthly service fee, you are usually better off going elsewhere, as there are so many banks now that do offer free accounts. Many banks now offer free online bill pay, so if your bank charges for that service, that could be another reason to consider going elsewhere.

All things considered, just think before you leap. The hassle may be worth it.