Where you bank matters. Not only are you putting trust in them to manage your money, but your bank’s interest rates and fees have a huge impact on your finances. If you have found a better banking option, then it may be the right time to switch banks. Although change always comes with headaches, choosing the right financial institution and accounts can save you valuable time and money.
7 Signs That It Is the Right Time to Switch Banks
Perhaps you have already considered changing financial institutions. If you are still struggling to make a decision, here are a few signs that tell you it is the right time to switch banks.
1. You Found a Bank with Better Accounts and Better Banking.
You should always shop around. The same is true when comparing financial services and products. If you find a bank that has better interest rates, more rewards, and lower fees, make the change! Options for free checking or free services save you money. So, it only makes sense to take the better deal.
2. There Are Mounting Fees.
Another reason to switch is when your accounts have mounting fees. Many banks have cancelled free services and begun charging to offset lost revenue at their customers’ expense. If you were to sort through and tally your accounts’ monthly fees (ATM, transaction, overdraft, maintenance), I bet you would discover that you are spending more than you realize. Although every financial institution charges fees, some charge more than others.
3. It Is Inconvenient.
If it is inconvenient to access your money, you should look at other banking options. Most financial institutions have online and mobile banking which makes things easier, but it isn’t always enough. Some issues are just simpler to handle through face-to-face interactions. So, if your bank only has a few brick-and-mortar locations or you are moving to a new place with no local branches, it is probably the right time to switch banks.
4. Your Bank Has Poor Customer Service.
Did you know that the average American has had the same checking account for 14 years? That’s because banks understand the importance of fostering long-term relationships with their customers. Banks need a relationship built on trust. Their employees play a crucial role in building successful relationships. However, if they are rude or have poor customer service or make you wait, it could cause you more stress than it’s worth. If quality customer service is important to you, ask friends and family about their experiences to decide if it’s time to make a change.
5. You Have Had Security Issues with Your Accounts.
We have all read the headlines of recent hacks, computer errors, and corruption charges within the financial world. Security is a huge concern. So, if your bank has a history of doing shady business or no FDIC accreditation, then consider it a sign that it is the right time to switch banks. You don’t want to take unnecessary risks with your money. It’s better to find a safe and trustworthy financial institution to manage your accounts.
6. You Have Too Many Accounts.
Perhaps you have several accounts at different banks. Working with multiple institutions can get messy. Merging your accounts is a great solution to consolidate and organize your finances. It also increases your accounts’ security. Not only do you have fewer passwords, but also reduces the risk of mistakes when the same institution handles all your transactions.
7. The Bank Goes Against Your Ethics or Values.
When it comes to managing your money, you want to bank with an institution you feel good about. However, several multinational banks have recently been found guilty of corruption and taking advantage of customers. While large banks are convenient, you should consider changing banks if you feel uneasy using their services. I know that I prefer a bank that aligns with personal values and has a good reputation with its customers.
Create a Checklist When You Switch Banks
Sometimes making the decision is the hardest part. However, creating a checklist can make it faster and easier. When you have a roadmap, it makes the task less daunting and ensures you don’t waste your time.
- Compare Options and Choose a Bank
The first decision is where to bank. Compare your options to determine which one has the types of accounts and services you need. You should also take into account their customer support, online banking accessibility, fees, and interest rates. Be certain to look at all your options including traditional banks, credit unions, and online banks.
- Open an account
This only takes a few minutes, but you can’t transfer funds until you have a new account. Once you make the opening deposit, set up your online banking and create a login. However, you might want to wait before closing your old account. Most banks advise to wait until you receive your debit card and download their apps before completing the switch. It is also smart to begin using the account before transferring funds to ensure everything works smoothly.
- Plan Ahead
Banks need time to process requests and transfers. Since it typically takes 7-10 business days to issue cards or checks, use this time to prepare your new account for the transfer. In addition to setting up your online and mobile banking, you can also use the time to link it to your other active accounts. Furthermore, you can use this time to complete any necessary forms they require for you to use certain features on their accounts.
- Ask Your Bank about Account Switching Services
Some banks have dedicated departments to handle the entire process for you. They take the time transfer all your automatic payments or direct deposits for you. Moreover, they will also contact former bank and notify them to close the accounts in question. This saves you a ton of time and headaches.
- Review Automatic Payments
Setting up automatic payments is a great way to help you manage your monthly bills. However, it can be a hassle to switch them over when you open a new account. Rather than rushing to close your old accounts, wait a month to review your activity and track them. While most recurring deposits and payments happen monthly, some occur less frequently. Giving yourself this time to review the details ensures you don’t miss one.
- Schedule a Day to Finalize the Switch
The last step is to mark a day on the calendar to finalize the switch. This provides you one last opportunity to run through your checklist and ensure you completed everything before you empty your account and close it for good. When it comes to financial matters, such as switching banks, it’s better to take the extra time to avoid costly mistakes.