Big banks have taken a beating lately, with Bank Transfer Day and the fever-pitch mood of switch, switch, switch. According to a recent study by management consulting firm cg42, consumer furor over fees could mean a loss of $185 billion to big bank coffers over the next 12 months.
People are fed up, jumping to credit unions and smaller banks. Should you do the same? When does it pay to stay put? There are a few factors to take into consideration before voting with your feet.
Are you ready to take on the hassle of switching?
You will have to open a new account, order new checks and debit card, set up electronic transfers between your old and new account, set up online banking and online bill pay, move automatic recurring payments from your old to your new account, move direct deposits to your new account, and more. You’ll need to be careful too, that all your checks have cleared from your old account. You might get dinged for a monthly maintenance fee when your old account drops to below the required minimum as you’re winding down the account. Switching is not onerous, but it’s not exactly painless either.
Can the marriage be saved?
Are you happy? Since fees seem to be the primary cause of divorce, take a look at all the fees you’re charged – from debit, monthly maintenance, online banking and any number of things. Don’t guess. Pull up statements for the last 6-12 months, and see if you can find out what competitors charge for similar accounts. If your banking fees aren’t keeping you awake at night, there’s probably little reason to run off. Know that while some smaller banks may have lower or no fees, there may a good reason for that; they may be offering less in terms of products and services. While double digit interest rates are not to be had on traditional savings accounts anywhere, if your bank’s interest rates are not significantly lower than the competition, it earns points for that too.
Is your bank accessible and does it have a good network of ATMs?
This may be important enough to sway you decide to stay put. If competitors don’t have much in the way of branches, and ATMs, and you are frequent ATM visitor, this counts. You don’t want to waste money paying “foreign” fees when using other institutions ATMs because the bank’s offering is sparse. You’re especially doing well, if your bank reimburses you as much as $20 in fees, or up to six ATM transaction per month, if you use a foreign ATM.
Is your institution tech savvy?
Do you have the suite of technological wonders available to you -- account alerts, online account transfer, digital deposits and other more modern conveniences than you can probably take advantage of? If yes, you have it good.
Are you treated with love?
Does it seem like the staff believes that motto, “the customer is always right,” perhaps they even “know you” -- that matters too. A personal relationship especially is important if at some point you might need a loan.
Is loyalty rewarded?
Some banks reward customers with benefits for multiple or ongoing relationships. Does yours?
Are you on the same page?
Increasingly people want to do business with a company that has values that align with theirs. Do you care what kind of corporate citizen your institution is? How do they measure up on the corporate responsibility stick? If you’re concerned about environmental issues, princely compensation packages for management and your bank belongs in the hall of shame, that may make a difference? But, if you mostly see the world from a similar point of view, score one more for your current bank.
Do your analysis and decide. If your bank doesn’t measure up, despite a bit of work, switching may well be worth it. With banks under pressure, there is an opportunity to shop around and perhaps find a better deal. But if your current bank is best, ignore the urge to follow the crowd, stay put.