5 steps to switch your bank
Fed up with the decision by Bank of America and other banks to charge a monthly fee for debit card use, as well as other new fees?
This post comes from Ellen Cannon at partner site MoneyRates.com.
When Bank of America announced it will charge a $5 monthly fee for debit card use, consumers erupted with a torrent of angry words.
Other banks have already begun implementing or testing similar fees: Wells Fargo begins testing a $3 monthly fee on Oct. 14 in Georgia, Nevada, New Mexico, Oregon and Washington; JPMorgan Chase is testing a $3 fee in Wisconsin; Regions Bank will impose a $3 fee beginning Oct. 1; and SunTrust is already charging a $5 monthly fee for using a debit card.
What can mad-as-hell bank customers do? Switch banks. Most consumers don't change banks because of the hassle involved. These new fees, though, may get them on their feet.
Some banks have "switch kits" online to make moving your checking or savings account to their bank a simple process. But if you want to take your business to a bank that doesn't have a kit, the task is still not too difficult. Follow these five steps to make a smooth transition to a bank with lower fees.
Choose your new bank. If reducing fees is your top priority, take note of all the different types that may be triggered by everyday bank transactions or services. These include not only debit card fees but also monthly maintenance fees and overdraft fees. (The most recent MoneyRates.com bank fee survey showed that the average monthly maintenance fee for checking accounts can take a hefty $141 out of your balance each year.)
You'll also want to be sure your new bank has a convenient network of ATMs so that you don't have to pay out-of-network fees, which can run as high as $4 or $5.
You can search MoneyRates.com to find both online and brick-and-mortar checking accounts. Then compare the details of each account: What is the minimum balance to avoid monthly fees? Is the online bill payment platform easy to use? Are there charges for paper statements or copies of checks?
As for your old bank, find out if there is a charge for closing the account. If your account has been open longer than three or six months, the bank most likely does not charge a fee.
Open the new bank account. Once you've chosen your new bank, you need to open the new account before you close the old one. First, you'll need identification. Most banks will accept these forms of ID:
- Valid photo ID, such as a driver's license or passport.
- Social Security number or alien registration number.
- Proof of address, such as a utility bill.
You'll also need to fund your new account with some amount of money. To do an electronic funds transfer, you will have to supply your old account number and bank routing number. These are the numbers printed on the bottom-left corner of your checks.
Change your direct deposit. Most people use direct deposit for their paychecks or Social Security checks. To make sure those funds arrive in your new bank account, you'll have to fill out the proper forms. Again, you'll need the new bank's nine-digit routing number and your new checking or savings account number.
Check that your old checks have cleared. While you're in the process of switching banks, you'll have to keep an eye of the checks you've written on the old account. Do not close your old account until all checks have cleared. Otherwise you'll wind up with a non-sufficient funds fee.
Make sure automatic payments stay on autopilot. According to Fiserv, a financial technology company, 31.5 million consumers had their bills automatically debited from their bank accounts in 2010. If you pay many of your bills automatically, you'll need to change those payments. And it goes the other way too: If you have money automatically deposited into savings accounts or money market accounts, you'll need to set up those deposits to go to your new bank.
Just as with outstanding checks, be sure to keep enough money in the old account to cover any electronic payments you need to make before the new bank account is up and running.
You can finally close your old account after all of the checks from that account have cleared and the automatic payments and deposits have been set up for the new account. Happy banking!
More on MoneyRates.com and MSN Money:
Granted, this seems like pretty basic info; however, if you've ever stood in line behind someone at a teller window for 15+minutes because they couldn't figure out why their check book didn't balance with the latest statement.....well, this is necessary.
Of course, those people probably aren't reading websites like this, still.....
You'd think that people should know this, but I was a teller for about 6 years and I do get those people who had no idea on what steps needed to be covered when switching accounts. It is only a headache when people don't know what to do in this situation. And it is not just the elderly, I have seen it from all different types of people.
On a side note, if you do decide to switch financials, go to your local credit union! You will save much more and you will be much happier!
I still don't understand why people have remained with these big bank rip-off artists for so long! I have two bank accounts - one with a local bank and one with a credit union. I've been with them for years and it makes me laugh whenever I see people complaining about the fees and lousy service at BoA, Wells Fargo, JPMorgan, etc. Hello! You have a choice! You had a choice when you set up the account! Many of the tellers at my bank know me by name, I pay no fees - ever, and I've even gotten a courtesy call from the bank to alert me to an overdraft situation. NOT a letter five days later telling me that I was being charged $35, an actual phone call ON the day the overdraft would have happened, which allowed me to put money in to AVOID the fee.
WHY do people pay MORE for service that is so much worse... and even downright lousy and insulting?!?
My advice is to call all the billers that have auto pay set up. I tried doing it all online and it didn't work out right. Caused a mortgage to be paid from the old account with no money in it. What a mess that caused.
Be aware that many new accounts will hold any checks for 5 days before depositing them until the account is a month old. They likely won't even tell you until you figure it out on your own. By that time you already have a paycheck with a 5 day hold on it.
On top of that it took almost 2 months for my wife's employer to switch over her direct deposit.
It is a big hassle to switch. Hopefully, I won't have to do it ever again.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Banks often use sign-up bonuses as a way to get new customers to apply for one of their cards. But are you guaranteed to earn the bonus?
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'