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Is Time to Upgrade Your Checking Account?

Some people change their cell phones every couple of years and others get a new car every few years. But when it comes to checking accounts, people set it up and consider themselves finished. Recent research from Fiserv showed that the average person keeps his or her checking account for 10 years. But failing to upgrade a decade-old checking or savings account means you may be missing out on the latest and greatest your financial institution has to offer.

"We encourage people to evaluate whether their checking accounts are keeping up with their lifestyles," said Beverly Ladley, client strategy and solutions executive at SunTrust bank in a prepared statement. "On average, people keep checking accounts years longer than cell phone, jobs or cars. As life’s circumstances change, however, people should consider upgrading their checking accounts as well."

Here’s how to tell if it’s time to upgrade your checking account.

You’ve reached a milestone

Life events such as getting married, a new child, or move, for example, are often a good time to review how well your checking account is working you. Most banks offer a variety of accounts intended to meet customers’ needs at different stages of their financial lives. These will typically include a range of benefits, plus ways to offset a monthly fee.

"Customers should consider their level of financial activity and determine if they would benefit from features such as preferred rates on loans on deposits, discounts on banking services or breaks on ATM fees," says Lane Dunn, manager of product strategy at First Citizens Bank. "You may need a simple transactional account or one that supports more complex financial needs. A good relationship banker will help you identify the best for your life stage."

If you’re a young professional but your account is still "student" checking, you’ve likely outgrown your account, says Steven Hughes, founder and chief financial mentor for Know Money, a financial literacy organization.

Location is everything. If you moved and there are no bank branches near you, consider switching. "I’ve seen people use a checking account from the federal credit union or local bank from their hometown, but are no longer located there and have to do everything online or over the phone," says Hughes.

Your money would be better served elsewhere

Another sign – when balances start to increase monthly without little to no debits. "This is a tell tale sign that you don’t need a checking account for what it offers. You would do best in a savings account or another investment vehicle," says Tai McNeely, co-founder and editor of the HisandHerMoney blog.

You haven’t talked to a banker since opening your account

"People don’t talk to their banker so they don’t realize that if have multiple accounts, or have higher balances or credit cards with the bank that may entitle them to receive free or discounted perks, such as free cashier’s check, free personal checks, discounted loan rates, and higher interest rates on savings accounts, just to name a few," says McNeely.

Being clueless about your financial institution’s latest offerings can be costly. Financial institutions continue to roll out enhancements that can save you money, time and help you manage your money. "If you check your account and still have to do math to figure out how much you spend, it’s time to consider a new checking account," says Lauren Berg, a spokeswoman for Simple, which offers online and mobile banking. "Current balance doesn’t tell the whole story and you shouldn’t have to get out a calculator just to figure out if you can afford to buy that new pair of shoes or splurge on a last minute vacation."

Simple’s Safe-to-Spend, she says, is a more relevant version of your available balance. "It does all the math for you by taking your balance and subtracting upcoming bill payments, pending transaction, and goals you’re saving for. With Safe-to-Spend, you get a more accurate picture of what you can really spend today without hurting yourself tomorrow," says Berg.

SunTrust has a new lineup of checking packages designed with lifestyle in mind. For example, the Essential Package includes an Essential Checking account with simple ways to waive the monthly maintenance fee, including 10 or more monthly transactions; and no monthly maintenance fee for five years for students. Whereas, the Signature Advantage Package includes a Signature Advantage Checking account (and up to four additional Essential Checking accounts with no monthly maintenance fee); unlimited non-SunTrust ATM transaction fee refunds, an option to participate in Delta SkyMiles Debit Card program, a small safe deposit box with no annual fee, and an introductory promotional money market account interest rate.

Simply put, there’s a lot going on. Know what’s happening. Andrew Bosserman a certified public account says he recently completed a 5-month trip through Asia and was able to withdraw local currency in each country fee-free using a Charles Schwab High-Yield Investor Checking Account. "The account has no fees whatsoever and no minimum balance requirements," says Bosserman.

How did he find such a gem? "I was reading travel blogs. This was recommended by many world travelers. Just using Google to search for a checking account with the features you want such as ‘fee-free checking account with remote deposit’ will help you find what you want," says Bosserman.

The bottom line says Lane, "Understand that the checking account is the anchor for your primary banking relationship."

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bellneice   |     |   Comment #1
A "banker" is a paid employee whose job it is to make money for the bank, not me, so I only talk them when I absolutely have to, and rarely their advice. And at some large banks, they don't seem to last very long - I never talk to same "banker"  twice. I resist switching my accounts because I believe there would likely be rules or restrictions that would not be in my best interest buried in the fine print of the new 600 page account agreement. 
Anonymous   |     |   Comment #3
Matter of knowing what I know and not knowing what I don't have/want
Anonymous   |     |   Comment #7
Hey banker, I have this no fees, no minimum balance, no inactivity fees checking account, what do you think, shell I close it and come to your bank?
RJM   |     |   Comment #2
I have 3 Reward Checking accounts, 2 local credit unions, Ally & CapitalOne online and a discover checking account.  Checking accounts coming out of my ears.
RJM   |     |   Comment #5
Would recommend Discover checking to those looking. While they don't pay any interest, they DO give you a $50 bonus for opening the account and also 10 cents per transaction. Even $1 billpays pay 10 cents.

I abuse it a little by paying 5 $1 per month payments, I also get 40-60 cents per month from using my Debit card at Aldi.

They even pay 10 cents for each check you write. (I don't write many checks nowdays)

I don't really consider ANY of my checking accounts my "primary".  I try to pay as many bills as possible with credit cards for cashback.

Even my power bill. While Alabama Power charges a $3.60 fee, I can pay $600 at a time and get back $9. Which means I make $5.40 for prepaying my power bill for 4-5 months.

(I only have a 1.5% cashback card)
Anonymous   |     |   Comment #10
Even $1 billpays pay 10 cents.

I abuse it a little by paying 5 $1 per month payments

Wow!  :-(
Anonymous   |     |   Comment #11
... and that's why we can't have nice things - or at least good deals that last a while.
RJM   |     |   Comment #14
I have been doing 10-12 small transactions for my reward checking accounts for years. I like to knock them out at the first part of the month.

Im sure Discover has people doing far worse than I do.
bbug   |     |   Comment #20
Comment #10 is my only post in this thread, but this 10 cents per online bill pay reminded me of a story I think is apropos.

A married couple had fallen on hard times. They both lost their jobs and couldn't find new ones. One day the husband convinced the wife to prostitute herself so they could eat. She went to the local red light district.

Twelve hours later, she returned home utterly exhausted. She dragged her purse across the floor and collapsed on the couch. The husband said. "Wow. Looks like it was a rough day. How much did you make?"

She could hardly talk, but managed to get out: 500 dollars and ten cents." He said: "Not Bad. But who the hell gave you ten cents"?

"They ALL DID"!!!!!

I know you don't have to work that hard for your dimes, but any work at all is too much for one dime in my opinion.
Anonymous   |     |   Comment #12
And, at 1% you are still losing money!  I use to prepay items but only/for to have itemized for taxes and the next year was std deduction.  Kept on alternative to raise the net for me.
RJM   |     |   Comment #13
I used to get 1.5%. But just found out they discontinued that and I only got 1%.

So.... $603.60= $6.02-3.60= $2.42 non-taxable gain for prepaying about $460.

That's more than I would have earned in interest in a 1% savings account.
Anonymous   |     |   Comment #15
You lost 1% plus by letting the bank hold the funds rather than putting into some type of savings account
RJM   |     |   Comment #16
you are an idiot. 
Anonymous   |     |   Comment #17
What is a minimum of 1% of $460 for the year?  And, then having that "free cash" available to you, if needed, for other items?
RJM   |     |   Comment #18
The $460 isnt for the entire year, its for 3-4 months with a declining balance. And the interest is taxable. Cashback is not.
I have plenty of free cash available. Im not eating cold oatmeal because of it.
Oh and Al Power doesnt charge $3.60, they charge $2.25.
Might be The sewer bill is $3.60 to use a credi card.
You really think I didnt do the 8th grade math before overpaying ?
Anonymous   |     |   Comment #19
Go for it!  Good Luck!
Anonymous   |     |   Comment #4
A banker wants you to close those free checking accounts and open one with 100 hoops so that they can get you on something and charge you a fee.
It is all about making money out of you. A banker has no interest to give you something better than what you already have.
CC in CA
CC in CA   |     |   Comment #6
Ugh. I just got word via email that PROVIDENT Credit Union (California) is changing their Super Reward Checking so that you now are required to use your debit card or their credit card for a MINIMUM of $300 in expenditures per month in order to qualify for interest on your checking.  I would rather not apply for another credit card, and I don't use their debit card.  Now it is time to shop for a NEW checking account to use. 
rjm   |     |   Comment #8
For those looking for a rewards checking, I like Lake Michigan Credit Union.
3% on $15k for 10 transactions, 4 logins and an ach.

And the coolest feature is they have a Status Link that shows when you meet your qualifications.

Max Checking Status
Monthly Requirement - As of:09/02/2015CurrentlyRequirement Met for MonthDirect DepositYesYesDebit Card Purchases 10YesHome Banking Logins 16YesEStatementsYesYesMonthly Requirement - Last MonthCurrentlyRequirement Met for MonthDirect DepositYesYesDebit Card Purchases 12YesHome Banking Logins 53YesEStatementsYesYes   Requirements
  • Direct deposit into this LMCU account
  • Minimum of 10 debit card purchases per month
  • Minimum of 4 logins to online banking per month
  • Be eligible for and sign up to receive eStatements/eNotices
rjm   |     |   Comment #9
I also have my Health Savings Account at LMCU. Pays 2%. (1.5% under $5000)

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