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.
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%. 🙂