Before You Change Banks
A few Tips to Avoid Headaches
Sometimes things don’t work out. You may need to change banks from time to time when you discover that you’re not banking at the right institution. Perhaps you’ve moved to a new location and you need a local bank. Whatever the case, make sure you know what you’re getting into before you make the switch.
Is it Worth It?
OK, so you’re dissatisfied with your bank. You may be angry, disappointed, and earning less than the national average. But does it make sense to change banks? It’s worth taking the question seriously before you move forward. Changing banks is a major process, mistakes will cost money, and you may not be any better off after the switch.
Make sure it’s really worth the hassle. This may require you to research banks, do some math, and predict the future.
If you’re switching for better savings rates, run some numbers on a compound interest calculator to find out how much more you’ll really earn (and remember that you money might not earn anything for a few days while you switch banks). Is the extra interest worth the time it will take to change?
If you want to change banks to avoid fees, make sure that’s the right choice. Start by letting your current bank know that you dislike the fees, and ask what your options are. They may have a variety of products (levels of service) available that you were not aware of, or you may be able to qualify for a fee waiver by setting up direct deposit into your account.
Moving your money might get you a better deal, but be aware that rates and policies may change shortly after you change banks. Your new bank may quickly become just as unattractive as your old bank -- only make a switch if you’re really coming out ahead. Research the new bank to see details on fees, and find out if they have a history of consistently offering competitive rates (you don’t want to fall for a teaser rate).
Evaluate the Options
Once you’ve decided to change banks, you’ll need to find a replacement. Take your timer here; you want to choose well so you can avoid going through this again in the near future. Things may have changed since the last time you opened an account, so keep an open mind. Be sure to consider a variety of candidates, including:
You’ll lose access to a lot of valuable information when you change banks. You won’t be able to search through your old account’s history if you need to research a transaction or prove that you paid for something. Download everything you need after your last transaction hits the account.
- Download official statements (especially if you need to document assets for a home purchase in the near future)
- Get images of important checks (you may have to call the bank and request images if it’s been more than a few months since the check cleared)
- Download or export transactions to your personal finance software