Moving is often a chance to make a fresh start. Is it also an opportunity to dump your bank?
According to new research from TD Bank, moving impacts banking behavior. Twenty nine percent of those surveyed said they opened a checking account at a new bank when they moved. This was especially true for the 55-plus crowd, 32% of whom switched banks. In contrast, among Millennials, (those 18-34), only 24% did so.
That Millennials were not quick to leave was not news to some. "They see traditional banking as irrelevant. Branch banking is losing a role in the daily lives of young people, the same group that is typically mobile savvy and trusting," says Ben Katz, CEO and co-founder of Card.com. They are big online and mobile bank users, so location is not an issue.
So what’s the takeaway from the survey? "Life changes are likely to have an impact on people’s banking choices. When they are choosing a new bank, convenient locations are still a very important factor, specifically, the proximity of a bank’s location was the top consideration for consumers when they choose a new bank after a move, and nearly 20% said they needed a bank a mile or less from their home," says Lindsay Sacknoff, senior vice president, head of retail deposit products for TD Bank.
For banks, the lesson is clear, "Make sure banking is convenient for consumers, no matter how they want to bank," says Sacknoff.
Opening a new account or transferring accounts (with the current bank), in or to a different state, for example should be simple.
The big surprise, sys Sacknoff, "In a world where people are conducting more and more of their banking business online and on mobile devices, it’s important to be aware of the fact that physical locations remain important to many consumers."
While location counts, 27% of people said they also changed banks when they moved to avoid fees and charges. Those who decided to stay put with their bank despite moving said they had the following challenges with their existing checking accounts, access to bank branches, 13%, access to bank ATMs, 10% and depositing checks, 8%.
So is it a good idea when you move to also switch banks?
"It’s a good time to investigate what options are best for your new circumstances. That could mean choosing a bank with a large network of stores and ATMs, finding an account with a low minimum balance requirement, or seeking out a financial institution that rewards relationships by offering a discounted home equity or mortgage rate for consumers who hold a checking account," says Sacknoff.
Financial columnist David Bakke of MoneyCrashers.com says switching when you move is a good strategy, particularly if there are branches or ATMs closer to your new home. But he says like everything else, there is a process for changing banks. "Make sure the transition is as seamless as possible. Avoid missing automatic bill payments and then incurring overdraft charges. Be sure you get a complete list of fees so you don’t wind up paying more."
On the other hand, Anthony Alfidi, CEO of Alfidi Capital, says jumping ship, "Is probably a bad idea for most people. National banks have branches in every state, so lack of convenience isn’t a problem. Investment brokerages and insurance companies have bank account services that customers can use from anywhere. People switching are likely those who likely have been exclusively using local banks or credit unions with no branches outside a local region or limited online capabilities," he says.
He points out a possible downside, "Switching a credit card balance to a new bank means interrupting a credit history a consumer is building with a long-standing card."