How to Switch to a Better Bank
Lean towards fee-free accounts., Don’t settle for a financial institution without mobile banking., Consider the availability of physical locations., Decide based on interest rates., Ask about specific security features., Take customer service...
Step-by-Step Guide
-
Step 1: Lean towards fee-free accounts.
Many financial institutions do not charge fees to open an account.
However, many accounts do penalize you with automatic fees if your account balance drops below a certain minimum level.
Further, many accounts also have overdraft fees.Ask to see a written description of any fees associated with the accounts a financial institution offers.
Often, you will be shown a printed table that includes all of the potential fees and penalties you may incur.
In terms of checking accounts, credit unions almost always offer accounts with less frequent or smaller fees compared to banks. -
Step 2: Don’t settle for a financial institution without mobile banking.
Admittedly, this one of the few factors that many larger banks handle better than smaller ones.
That said, the convenience of online banking, including the availability of easy-to-use apps for your phone, is important.At a minimum, make sure you’re able to check your balances and make deposits and payments online.
A financial institution that doesn’t offer these services yet is clearly behind the times. , For many financial institutions (though not all), there will be certain things you need to do in person.
Proximity to a branch location is therefore another factor worth considering, especially if you prefer to do your banking in person.The availability of ATMs is also important if you like to be able to withdraw cash easily.
While bigger banks often have many ATMs, most credit unions belong to the CO-OP system that allows their users to use other credit union's ATMs without paying a fee. , Rates may or may not be an important factor, depending on how much money you keep in deposit accounts.
If you do tend to keep money in savings and checking accounts, you can make money on those deposits from high annual percentage yields.Online-only institutions are often able to offer higher interest rates, and thus better returns on your deposits, compared to banks with lots of branch locations. , You should only bank with a financial institution you can trust.
In fact, financial institutions are increasingly offering the ability to customize your own security settings.
For instance, you can set up text alerts through many mobile banking platforms to notify you about account activity.
Be sure to ask a bank employee about the specific security features their accounts offer.Another specific security feature you may want is the ability to lock and unlock your debit card as you wish.
Further, ensure that debit cards issued by the financial institution you're considering include a chip. , As important as online banking is, don’t underestimate the importance of being able to talk to someone when you need to.
In this capacity, big banks are notoriously inaccessible.
It can be especially helpful (and comforting) to speak with a human being via phone or live online chat about anything you have a question about., If you are searching for a specific financial service that is not offered by your current institution but are otherwise happy with the account you have, you may want to simply open an additional account elsewhere.
This will allow you to select a new account based primarily on the service you’re looking for.For instance, keep your current checking account, but consider opening up a new account at an institution that offers the best rates on auto loans.
Visit the Consumer Reports website and search financial institutions according to the service you’re shopping for.
For auto loans in particular, credit unions are often the best bet.
Credit cards and mortgages are other services that you may be able to find a better provider for.
The best options for credit cards and mortgages are often financial institutions that are exclusively online.
Credit unions can also be great for mortgages. , For many people, credit unions offer several distinct advantages overs banks.
Perhaps most important, rates and fees are almost lower at credit unions, and customer service is almost always better.
That said, banks often do have better online banking interfaces, and their size may make accessing your money during international travel easier.The main difference between these two types of institutions is that banks exist primarily to generate profit that goes to the bank’s owners and business executives.
More to the point, they exist to make money off of you.
Credit unions are legally tied to a certain region, employer, faith, or other community association.
The money that credit unions make becomes small dividends that are paid to all account holders, discounted loan rates, fee reductions, and other benefits for the credit union’s members.
Go to www.mycreditunion.gov to learn more about credit unions, and to find a credit union you may be eligible to join. -
Step 3: Consider the availability of physical locations.
-
Step 4: Decide based on interest rates.
-
Step 5: Ask about specific security features.
-
Step 6: Take customer service seriously.
-
Step 7: Consider maintaining accounts at multiple financial institutions.
-
Step 8: Consider banking with a credit union.
Detailed Guide
Many financial institutions do not charge fees to open an account.
However, many accounts do penalize you with automatic fees if your account balance drops below a certain minimum level.
Further, many accounts also have overdraft fees.Ask to see a written description of any fees associated with the accounts a financial institution offers.
Often, you will be shown a printed table that includes all of the potential fees and penalties you may incur.
In terms of checking accounts, credit unions almost always offer accounts with less frequent or smaller fees compared to banks.
Admittedly, this one of the few factors that many larger banks handle better than smaller ones.
That said, the convenience of online banking, including the availability of easy-to-use apps for your phone, is important.At a minimum, make sure you’re able to check your balances and make deposits and payments online.
A financial institution that doesn’t offer these services yet is clearly behind the times. , For many financial institutions (though not all), there will be certain things you need to do in person.
Proximity to a branch location is therefore another factor worth considering, especially if you prefer to do your banking in person.The availability of ATMs is also important if you like to be able to withdraw cash easily.
While bigger banks often have many ATMs, most credit unions belong to the CO-OP system that allows their users to use other credit union's ATMs without paying a fee. , Rates may or may not be an important factor, depending on how much money you keep in deposit accounts.
If you do tend to keep money in savings and checking accounts, you can make money on those deposits from high annual percentage yields.Online-only institutions are often able to offer higher interest rates, and thus better returns on your deposits, compared to banks with lots of branch locations. , You should only bank with a financial institution you can trust.
In fact, financial institutions are increasingly offering the ability to customize your own security settings.
For instance, you can set up text alerts through many mobile banking platforms to notify you about account activity.
Be sure to ask a bank employee about the specific security features their accounts offer.Another specific security feature you may want is the ability to lock and unlock your debit card as you wish.
Further, ensure that debit cards issued by the financial institution you're considering include a chip. , As important as online banking is, don’t underestimate the importance of being able to talk to someone when you need to.
In this capacity, big banks are notoriously inaccessible.
It can be especially helpful (and comforting) to speak with a human being via phone or live online chat about anything you have a question about., If you are searching for a specific financial service that is not offered by your current institution but are otherwise happy with the account you have, you may want to simply open an additional account elsewhere.
This will allow you to select a new account based primarily on the service you’re looking for.For instance, keep your current checking account, but consider opening up a new account at an institution that offers the best rates on auto loans.
Visit the Consumer Reports website and search financial institutions according to the service you’re shopping for.
For auto loans in particular, credit unions are often the best bet.
Credit cards and mortgages are other services that you may be able to find a better provider for.
The best options for credit cards and mortgages are often financial institutions that are exclusively online.
Credit unions can also be great for mortgages. , For many people, credit unions offer several distinct advantages overs banks.
Perhaps most important, rates and fees are almost lower at credit unions, and customer service is almost always better.
That said, banks often do have better online banking interfaces, and their size may make accessing your money during international travel easier.The main difference between these two types of institutions is that banks exist primarily to generate profit that goes to the bank’s owners and business executives.
More to the point, they exist to make money off of you.
Credit unions are legally tied to a certain region, employer, faith, or other community association.
The money that credit unions make becomes small dividends that are paid to all account holders, discounted loan rates, fee reductions, and other benefits for the credit union’s members.
Go to www.mycreditunion.gov to learn more about credit unions, and to find a credit union you may be eligible to join.
About the Author
Brenda Gonzales
Brings years of experience writing about DIY projects and related subjects.
Rate This Guide
How helpful was this guide? Click to rate: