There have been a lot of changes in the banking world over the course of the last several years, and as a result, it has led many people to consider switching banks. But, doing so may cause more problems than expected if you don’t know what you’re getting into. Fees, account types and varying requirements aren’t as clear as they used to be, and it seems just when you think you have it all down, it changes yet again.
So, if the terms, conditions and fees of your bank seem to be ever-changing and no longer in your best interest, it very well may be time you made a move. Another institution may suit your specific needs more effectively, as well as save you time and money in the process. But, just as there are many reasons to leave your bank, there might be some reasons to stay, too.
It’s important to consider all the variables when making such and important decision, and knowing what to ask is just as important as the answers you may receive. The following are ten things to look out for when you are considering switching banks:
Sign-up Bonuses and Promotions
There are several banks will give you a sign-up bonus or some kind for moving your money to them – and sometimes it’s cash. These bonuses may be up to several hundred dollars or more, and are usually dependent upon the amount of your initial deposit, as well as some other various conditions like minimum account balances and a minimum time before the bonus is paid.
Often they are sent out as promotional mailers, but if you ask if the institution features and kind of bonus for signing up, they will usually give it to you. In addition, for those banks not offering a cash promotion, there may be options for a period of waived fees and charges. It doesn’t hurt to ask.
Variances in Basic Fees
Sometimes it’s easy to forget about charges for non-maintenance of minimum balance requirements, stop-payment fees, non-sufficient fund fees, deposit return fees, fees for document or check copies, over-limit fees, monthly service fees and account closure fees. They may give you a list, but they may not all be neatly itemized in a single location. Be sure to read each bank’s information carefully, as some banks charge a lot more for some things than others.
Out-of-Network ATM Charges
While most banks will have an entire network of banks and associated ATMs from which you may withdraw money free of charge, sometimes where they’re located isn’t all that convenient. If you travel often or travel to visit family in out-of-network locations, it’s best to know how much your bank charges for an out-of-network transaction. Some banks or credit unions charge as little as 2 dollars, but some can reach to 4 dollars or more per transaction.
Discounts on Services
Many banks will partner with other companies to offer discounts on services. There are be significant advantages to banking with institutions who provide for discounts on car rentals, travel services and accommodations, and more. Additionally, local businesses may partner with banks as well, extending your options to food, entertainment and other products and services, like the purchase of flowers.
Minimum Balance Requirements
Not everyone has a large sum of money that can simply sit in their checking account, so knowing what the minimum balance requirements are will help protect you against fee surprises that may be tacked on to your account. This is particularly true if your account balance varies greatly during the month. The good news is, there are options. Most banks will have more than one type of checking account available for their customers which allows them to choose the account that works best for them.
You may opt for a small monthly fee, rather than a minimum-balance option with a larger fee penalty for dipping below the minimum. In addition, many banks offer fee waivers for opting in to their monthly automatic savings transfers.
Fraud Protection Policies
Is the customer always right? Nearly all banks will offer some form of fraud protection for their customers, but it is important to know what their policy is. For instance, if someone uses your ATM card or makes an unauthorized purchase or withdrawal, what are your protections? They may return your money, but not in a timely manner. Know what you’re getting into.
Investment Access and Options
Many banks provide investment services and retirement planning, but you will want to know what is free and what isn’t. Additionally, they may offer self-directed services which allow you to invest your money in stocks and other securities on your own, but those come with fees and conditions, too. Ask what policies, perks and incentives your bank has for keeping your retirement nest egg with their institution, and ask for a detailed list of the fees they charge for such services.
The Perpetual Avalanche of Overdraft Fees
While a bank’s overdraft policies may keep you from having a purchase declined or a check bounce, they can come with a potentially endless avalanche of overdraft fees. The average overdraft fee is currently around $35, but that may not be the biggest problem. The problem lies in how the fees are applied, the number allowed per day, and extended fees and charges on a per-day basis while your account is overdrawn.
Often the largest charge of the day will be applied first, setting you up for multiple charges when, in theory, you really should have had only one. You may also want to ask if their overdraft protection involves a savings transfer option, which usually cuts the fee down to somewhere between $10 and $15 per transaction. Some banks also feature limited overdraft fee refunds as a courtesy to their customers, allowing for a rebate of up to one or more per year.
Holds on Deposited Funds
While regulations provide for banking customers to have access to the first $200 the same day as deposit, it’s important to know how soon you can have access to the rest of it. This can vary greatly between banks, whose access ranges from instant access to several days.
It is not just the type of deposit – like whether it is electronic, personal check, corporate check or wired funds – that may factor in, either. A bank’s deposit access policy may be dependent on the amount of the deposit, which when a certain threshold is reached, can limit withdrawal on a portion of your funds for several days.
Banking Hours and Customer Service Access
It does no good to bank with an institution if you can’t have access to your money and the people who work there. It’s best to be sure the bank you choose has a branch close enough to you, so they are able to serve your banking needs properly. However, just because a bank does not have a branch office close doesn’t mean they are off the table, many banks now have satellite branches in other locations – like grocery stores – which can provide limited banking services which might satisfy your needs.