We Changed Banks…Again

Bank-sign-3Over a year ago, we rejoiced triumphantly as we left the discombobulated mess that is Bank of America and went to a smaller, regional bank instead.  BofA was so bad, they would charge us fees month after month for no reason, even though their representatives would assure us in person that these fees should never be charged.  Because every time I called for help I got a different person, our problem would only get solved temporarily, and with a lot of twenty minute phone calls to go along with it.

At the bank we’ve been at for the past year, things had been going great.  Both Mrs. Mase and I knew all of the employees at our local branch, and they took good care of us.  Before long, things worked like clockwork and we didn’t have to deal with big bank problems anymore.  Or so I thought.

Even though we went a smaller bank that was more personable, we still went to one that had corporate strategy and stockholders as their primary focal point – not necessarily the customers.  Now, I don’t want to speak badly about them because they really were/are a decent bank, it’s just the series of events that forced us to leave happened to occur in a sour kind of way.

We got a letter in the mail near the end of last year stating that our particular bank branch was being sold to another regional bank, and that they were going to transfer over all of our accounts in mid- January.  After that we just started getting new check books in the mail.  There were no phone calls or follow up letters from the people at this new bank.  The people at the old bank had no idea what was going on themselves and couldn’t provide much useful information about the transition.  This was problematic because the next closest branch was fairly out of the way from where we live and where my wife works.  Again, we felt like we were just tossed around in the sea of the bank’s customers as one of many, and we certainly didn’t feel appreciated as customers anymore.

In looking for a new bank to house our family’s accounts,  we automatically ruled out any of the big banks.  Our past experiences and those of family and friends have shown us that that’s not the way to go if you desire a more personal (read: at least minimally human) banking experience.  Going to another regional bank seemed like an option, but what was to stop them from selling off their branch to a competitor too?  Granted, the probability of this occurring is relatively unknown, but we didn’t want to take the chance given the annoyance involved in shifting all of your money to another institution.

Next we explored online banks, which we considered as a feasible option.  One of the top contenders was Simple, an online bank based out of Portland.  After hours of research it really seemed like it might be the bank for us.  That was, until we learned that they do not offer joint accounts.  For us, this was a big deal, so we continued the search.  Also, the notion of not being able to withdraw cash easily on a regular basis made us think twice about online banks.  Although the world is moving toward exclusively digital transactions, we’re just not there yet.  When the day comes that the Federal Reserve stops printing physical money, we’ll deal with it.  Until then, cash is king!

We ultimately decided on going with a local credit union that has a branch that is a two minute walk from our house.  The convenience, obviously, is unparalleled, and the staff is friendly.  When can still go whenever we need to withdraw cash.  Most importantly though, the credit union has been around since the 60’s and is a credit union, so by definition we are the owners (technically, members).  This means slightly higher interest rates on deposits, more personalized service, and as close to guaranteed stability as you can get.  As long as the general population in St. Louis remains stable and growing modestly, there should be a reasonable pool of the population who can do business with the credit union.

I used to worry a lot about joining a credit union because the local nature of it worried me.  With the big banks, I liked knowing that I could travel to another city, in a completely different part of the country, and still be able to go to my bank’s ATM or branch.  With technology in 2016 though, this definitely isn’t a problem for most credit unions because of the CO-OP network.  Also, if we ever do move from the area, we’ll just switch to another credit union in the new location.

If you aren’t banking with a credit union, I would suggest at least looking into it.  You never know what the other side of the fence looks like until you take a peek.  Because I had never had experience with credit unions, I simply went along with what other people did – get an account at one of the big banks.  Sure, those guys tend to have fancier apps, bigger buildings and lots of money to loan you – but do they actually treat you like a person?  Do you they really give you the most competitive rates?  It’s important to continually ask yourself these questions.  After all – this is your money we’re talking about here!

Dueces, Bank of America!

bankofamerica

image: www.nbcnews.com

Yesterday we did something that we usually don’t do.  It hasn’t happened in over six years for either of us.  We quit our bank, Bank of America, and moved to a much friendlier institution.  By detailing our experience switching banks, I hope to help you gain some more information about how to approach the process by learning from our experience.

We’ve both been customers with these guys for over six years.  Yes, we’ve had the occasional customer service problem, or difficulties with fees, but nothing too major.  Nothing so incredibly bad has happened that would be classified as a single, terrible event.  No, it’s like a fly that keeps hovering around your freshly grilled burger at the barbeque.  It’s really not that big of a deal – you just kind of shoo it away and keep eating.  But when it keeps coming back over and over again – you lose your patience.  You put the burger down.  You march inside the house.  You grab your flyswatter and come back outside to swat that sucker.

That adequately describes our experience over the past few months.  Fees were getting charged when they shouldn’t have been getting charged.  After a twenty minute phone call with customer service, the problem would always get resolved, but it would inevitably come back as their system would always relapse and charge the fee the coming month.  The lady at our local branch practically scolded my wife when she asked to close her credit card account (although I admit, this is a typical reaction within the industry), and is consistently unpleasant when we ask to withdraw cash to pay for our daily expenses.

OK, this had to be stopped.  We were going to have to find something different.  I did some research, and compared several institutions to the baseline (BoA) based on several different factors that are important to us:

1)   Free accounts (direct deposit or minimum combined balance requirements are ok)

2)   Low ATM fees

3)   Easily understood and functional online interface

4)   Branch and ATM within walking distance from the house

5)   Branch within a few mile radius open on Saturday mornings

6)   Higher than average rates on Money Market Accounts (not as important but still worth considering)

7)   Oh and the most important….being treated like a human being instead of a number when walking in the door

There were a few other factors but those were the ones of primary concern.  While that last criteria could only be determined face to face by visiting each bank, all of the others could be more readily determined online.

After doing several comparisons and combing through different bank websites, I noticed different traits between each class of institution:

Big banks tend to have the best online/mobile portals and the most branch and ATM locations within the city.  They also have the most fees that are hardest to get around, the lowest rates, and calling their customer service line could easily take twenty minutes depending on what you need help with.

Mid-size/Regional banks also have good online and mobile portals and a decent amount of local branches and ATMs.  Fees tend to be lower than the big banks, and rates tend to be higher.  Customer service is a little easier.  The downside is the lack of ATMs when leaving city limits.

Local Credit Unions tend to have online and mobile portals too.  The number of branches and ATMs is usually very restricted, although co-op networks usually allow fee-free banking when you’re not local.  Customer service is solid and the rates tend to be the highest, since the members, not stockholders, own credit unions.  Overall perks however, tend to be more basic.

So how did we narrow down our selection?  Well, after looking into the other big banks it didn’t take a long time to realize that they are all pretty much the same, with slight differences.  Note that I am saying this from a customer’s point of view, not an investor’s.  For example, US Bank is one of the most conservative financial institutions of size out there as far as its business model goes, but from the customer perspective who just wants solid checking and savings options they offer just about the same services as the other guys.

Although I might consider US Bank as an investor, from a customer perspective it doesn't offer much of  a difference from the other big banks.

Although I might consider US Bank as an investor, from a customer perspective it doesn’t offer much of a difference from the other big banks. image: www.broadwayworld.com

This eliminated big banks as a category for us.  We naturally gravitated more toward the mid-size banks and credit unions.  Although credit unions had great rates and were pretty friendly when we talked to them, they didn’t seem to have the breadth or technological innovation that other places had.  Despite the co-op network being in place, I just couldn’t imagine myself being in another city and going to a different bank branch for something and having the transaction go smoothly.  Perhaps this is irrational on my part, but that’s how I feel.

In the end, we decided to go for a reputable mid-sized bank in the area.  It seemed to do the trick for us.  It has the features of a larger bank without making us feel like a number when we walk in the door.  Also, they reimburse all ATM fees (what!) and have a decent number of branches and ATMs not just in our city but elsewhere in the region as well.  When we’re visiting family in Chicago I know we’ll able to pop by at a branch or ATM if I need something.  Also, the rates for our savings were significantly higher than Bank of America’s.  Although I admit that in this day and age, it’s not too hard to beat 0.01%.  🙂