If you look into your crystal ball, it may tell you that 2014 will be a bad year for banks. A study by the Connecticut firm cg42 projects that banks could lose up to $92 billion in deposits as dissatisfied customers move their money to competing institutions that better serve their needs. Approximately two-thirds of those polled felt that banks don’t have their interests at heart. And if the 1 percent/99 percent divide widens, some of those 99 percenters may put their money where their beliefs are, and move their funds from big impersonal banks to friendlier community banks and credit unions. The latter are nonprofit member-owned cooperatives that offer better options to their members than they’ll find at big banks.
Or maybe you’d prefer to tuck your dollars under your mattress and avoid banks altogether. Unfortunately, there would then be no interest or mobile banking, and paying bills would be a nightmare. You count on these financial institutions; they’re just plain necessary.
But do they have to be a necessary evil? According to the American Customer Satisfaction Index, 1 in 4 consumers is unhappy with his or her bank. It may be due to excessive fees, poor product selection or irritating customer service. Sometimes, you may be happy with your checking account but, in reality, you’re getting a lousy deal. Here are the top reasons to change your bank account.
1. Looking for better fees
There was a time when banks wanted your money so much, they’d offer you free stuff—toasters, clock radios TVs—just for opening an account. Checks were free, and fees were minimal. These days, however, you may be charged for almost anything, including fees for maintenance, overdrafts, debit cards and returned checks. And with regulations squeezing profits out of bank coffers, new fees are popping up everywhere.
The top reason to change your bank is to get cheaper banking. To find the best deals, use a tool that offers you side-by-side comparisons of your options. Contact your local community bank or credit union, as well; they generally have more attractive options than big banks.
2. More bang for your buck
You work hard for your money, so you should squeeze everything out of it. Switch your bank account to one that offers more lucrative opportunities. Consider a high-yield savings account, for example, where you can take advantage of the power of compounding. If you open an account with $5,000, with a 3% yield, and invest an additional $100 each month for 20 years, your money will grow to more than $40,000. That’s a worthwhile payback.
Look for a rewards checking account, where you can earn high yields (1% APY or more). There may be certain requirements, such as making a specific number of monthly debit transactions, using e-statements or agreeing to direct deposits. A new bank may also offer better-than-average CD rates. The highest available interest is always in your best interest.
3. Location, location, location
It’s not only a mantra in real estate; it’s a mantra in all things. Find a bank that’s conveniently located near where you spend the majority of your time. If you travel frequently, a large national bank, with branches throughout the country, can be a lifesaver if you need cash or have checks to deposit. Fortunately, you don’t have to depend solely on the big banks, because many credit unions and community banks partner with ATM or branch networks that offer nationwide access. If your bank is closer to where you live and/or work, you’ll spend more time doing the things you love, and less time at the drive-up window.
4. Service with a smile
As more and more consumers are taking care of their banking online and on their mobile devices, in-house customer service may seem less important. But that’s not true. Good customer service is not only treasured by the over-40 crowd: A survey by TDBank revealed that 63 percent of Americans ages 18 to 34 go into a branch or use the phone when there’s a problem with their checking account. If you’re not getting the kind of attention you need from your bank, find one that appreciates you and your business.
5. It’s all about options
You’re the consumer—banks want your business—so find out what a bank can do for you. Does it offer mobile, tablet and online banking? Competitive CDs? How about good deals on mortgages and home equity loans? One-stop shopping has advantages, and the more products and services a bank offers, the easier it is for you. Plus, you may get better rates on certain products if you’re already a customer.
Once you’ve found the best bank for your needs, you can rest comfortably—especially because your mattress won’t be taxed with the burden of providing you with anything more than a good night’s sleep.
Saving money image via Shutterstock.