Breaking Up With Your Bank

Recently, a friend of mine who’s running a successful home business was talking about her work and mentioned the annoyance of her bank holding all her cheques for five days.

“Get a new bank!” the others in the room instantly hollered.

Yes, there are many reasons to break up with your bank, and this could be one of them. Over the top service charges, no branches or ATMs on your regular route, crappy customer service and products that just don’t suit your needs all can add up to a bank-customer relationship that’s no longer working. Even something like getting married and having spouses at different banks can make you wonder if it’s time for a change.

But moving to another bank is a lot of work, and might not solve all your problems. So head on in to meet someone at your current bank and see if you can work around them before you just head for the hills. Let your banker know you’re thinking of decamping — but no need for threats or being hostile.

See if you can get your fees lowered, set up a new account that’s more effective or get that annoying five-day hold eliminated. Perhaps you qualify for some loyalty benefits or lower rates thanks to the years you’ve been with the bank.

If not, or if customer service stays under par, time to go bank hunting.

Talk to family and friends about where they bank and how it’s working for them. If they’re willing to chat, you’ve got to be willing to ask real questions: what are your fees? How were they about mortgages? What kind of interest rates do they offer on savings accounts?

Go into a bank or two and have a detailed conversation with someone. Ignore introductory offers and free iPods. Nice, but not useful financially in the long term. Be sure this new institution really does have the kinds of products and services you need, and that the fees truly are better than the ones you currently pay. If you are your spouse are moving in together, or moving to be together, make sure the institution’s joint account policies, as well as other products, will work for you both today and in the future.

Never sign on the spot. Think about it later. If you’re easily suckered in by a good sales pitch (like me), you’ll think more clearly the next day.

If you find a new bank that’s got what you want, time to get to work. Get a new bank card, PIN numbers, cheques, online access codes. (Do NOT join a bank that doesn’t have a decent online banking platform!)

Then you need to withdraw all your money and inform your old bank you’re leaving (some might want a registered letter). Plus, you’ve got to cancel all your automatic withdrawals and deposits. This could take time! Make sure you’re keeping in mind not just monthly transactions, but annual or infrequent payments or withdrawals. If you’re worried about missing something, you could also keep your main savings account open with a small amount of money in it for up to a year just to be sure you’re catching everything.

In any case, for the next year or so, always open any and all mail from your old and new bank and any service providers. They might be warning you of missed or NSF payments.

Finally, once you’re set up at your new bank, take it upon yourself to cultivate a great relationship. Visit your banker and keep assessing your accounts and services. Ask questions, make sure you’re getting the right products, and see just how you can play a role in making your bank work effectively for you this time around.

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