What does it rake to make you switch banks?

When I was 14 years old, I opened my very first checking account at Bank One. That's where my Dad banked and so that's where he drove me when I asked to open an account. Over the years, I continued to give them my business.

By 16, I had opened another checking account (don't ask me why) and a new savings account, too. At 20, I started my journey into credit cards with… yep, a brand new Chase credit card. (Note: Chase ate Bank One in 2004.)

At 21, I opened my first Chase business checking account and, at 22, I funded $1000 into my new Chase investment account. When my wife and I married the following year, we canceled her National City account to combine our finances with… Chase.

You get the point. While this may not seem too out of the ordinary, there's only one problem: Neither of us really likes Chase Bank.

In fact, I've never really liked them that much. I've wanted to switch to a local credit union for years, but just haven't done it. I've been eyeballing USAA ever since they opened their checking and savings accounts up to civilians. Mentally, I want to change…but physically I'm still a Chase customer.

What Does It Take to Make You Switch Banks?

There are plenty of reasons why someone might switch banks. A couple factors that come to mind:

  • Higher rates. This not only applies to rate chasing to find the highest interest rates, but any form of benefits offered. Maybe there's a 0.5% better savings rate at the bank across the street. Maybe another is offering a free $100 when you open a new account. These are all situations where the bottom line may be the primary influence.
  • Customer service. I love great customer service and I'm willing to pay more for it. In banking, this now includes both in-person and online customer service features. While I abhor having to call Chase (try it someday, it's terrible),I love a couple of the people at my local branch. I know the branch manager and business banker well, and they always greet me by name. In addition, I have specific online banking features set-up that I've been using for years. Their online services aren't perfect, but they're above average.
  • Length of history. As I outlined above, I've had a Chase account for over a decade now (and I'm only 25). In this day and age, customers will longer histories at a single bank are more rare. Anytime I have an issue on the phone, I immediately have them look up my history. While I'm not a big fish to them in terms of money, my account history tab shows dozens of accounts over nearly a dozen years!
  • Principle. The longer I'm involved in personal finance, the more I prioritize this category. I'm not a huge fan of big banking. I'm not a conspiracy theorist and I won't be picketing in Washington, but I like the idea of giving my business to a local bank. “Principle” is a major reason Courtney and I reject credit cards, and many people point to this reason giving their business to credit unions.
  • Accessibility. Years ago, the only factor I cared about was how close my bank was to my house. Here in the Midwest, no one does that better than Chase. It's almost as bad as McDonald's (almost…)! With the rise of online banks, the walls of this one are coming down. For some, however, it remains a huge factor in choosing a bank.

So, will I walk the walk? I'm not sure whether Courtney and I will switch our bank. We want to, but we aren't compelled to…at least not yet.

I'd enjoy supporting a local credit union or a testing out a bank with a reputation like USAA. I'm not much of a rate chaser and accessibility isn't a huge priority. I much would prefer a bank I feel good about supporting and that offers me fantastic customer service.

At this point, Chase seems to be just doing enough to keep us around. But after writing this, we'll see how long that lasts!

Have you recently switched banks? What was your motivation? Any suggestions for me?

J.D.'s note: I stuck with a lousy bank for a l-o-n-g time. Ultimately, I moved my accounts to a local credit union, and I love it. I've since added an online bank to the mix (ING Direct). Neither of these banks is perfect, but they both provide excellent customer service and above-average deals, so I'm pleased to stay with them.

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basicmoneytips
basicmoneytips
10 years ago

I do not switch banks often either. The things that I do not want to deal with are switching my direct deposit forms and also electronic linking of checking accounts. Not that these are both particularly hard things to do, I just am not motivated enough to do it.

I bank mostly with ING and Bank of the Internet. Neither has been bad so that is probably what has not prompted me to move, even though I have seen some other banks I would probably like to try.

zip
zip
10 years ago

We switched to a more ethical bank after news about large bonuses the head of the bank we were at received while at the same time things were not going well at all for that bank.

Kristen@TheFrugalGirl
10 years ago

I really like having our checking account at our local credit union. It’s located right by my grocery store, so depositing checks and using the ATM is very easy, and I really just do prefer having a local bank for checking as opposed to an online bank.

Now, for savings accounts I am totally loyal to ING…I hardly EVER keep money in my credit union savings account.

Sam
Sam
10 years ago

We have all of our checking accounts and our primary mortgage with Wachovia, also have one small savings account there. Customer service with Wachovia is, I’ve found, great. I get great service, my accounts fit what I/we need, there are no fees, the locations are plentiful and within walking distance from our home, etc. The bulk of our savings is at ING and again I’m happy with ING but with rates so low I’ve been researching banks with better rates, we’ve got $25,000 in emergency fund money that I’d like to earn a better rate on (keeping it liquid and… Read more »

Bob
Bob
10 years ago

I have USAA as my bank (and insurer, and investment manager, and just about everything else) and I don’t have any reason to switch. For me it is much more about customer service than chasing rates. I can call them up any time and KNOW that I will have a pleasant experience on the phone and that whatever problem I had will be solved by the time I hang up. In addition, they offer great perks for being a customer (ATM fee reimbursement, free banking, great website & iPhone app). I’m not sure what it would take to pull me… Read more »

Someone
Someone
10 years ago

What made ME switch to a local credit union?

FEES!

The regular banks helped themselves – well, regularly – to some of my money every month and I didn’t like it! I don’t pay monthly fees to access my own money with my direct deposit.

My attitude is, they make money off our deposit holdings anyway, they don’t deserve more than that.

Mrs. Money
Mrs. Money
10 years ago

We just went through the same thing. We ended up sticking with our bank, but I’m still looking into going with a local bank or credit union.

http://ultimatemoneyblog.com/should-we-switch-our-main-checking-account-to-ing

Money Reasons
Money Reasons
10 years ago

I think people get use to a bank, that they are confortable with it. To go through the hassle of transferring your money, reconfiguring your automatic online distributions, and paycheck… It’s all a big hassle.

So to make me want to move, the benefits of doing so would have to be amazing (or maybe my bank would have to drop the ball and start charging dumb new fees).

We’re creatures of convenience, and to change banks every year or so is such a pain…

Mrs. Money
Mrs. Money
10 years ago

Baker, I think you should do a post on health insurance- like what are you doing for health insurance while you are overseas. It would be interesting, I think!

namesarehardtopick
namesarehardtopick
10 years ago

What made me change banks? A reward checking that offered 4.00% interest on the account, while the highest savings I’ve seen is American Express at 1.50% APY. Considering that my checking is paying well above prime rate, and savers are getting nailed in savings, I’d say I found one heck of a deal.

zmnatz
zmnatz
10 years ago

USAA is open to civilians now? Is this for all their services or just their checking and savings accounts.

Brian
Brian
10 years ago

When I switched banks, I put some money into a new account and didn’t close the old account. Then I switched over the auto payments as I had time.

I had a problem in the past with Chase charging me because I had closed the account, but there was a random auto charge still attached somewhere. If you keep it open for 6 months with a few hundred bucks, you can make sure you’re set before fully closing it down.

Susan
Susan
10 years ago

I started out with a local state bank, then opened up a new checking account at US Bank when I went to college. When I went home for the summer I didn’t actually have access to US Bank. (Sigh). Not long after I opened up a checking/Savings account with USAA and LOVED it. I didn’t need a ‘branch’ and I got free ATM reimbursement with foreign travel and they sent free pre-paid envelopes in the mail so I could mail in any checks I received. For a while I chased ‘high interest’ savings accounts keeping my primary USAA account for… Read more »

Joseph | kickdebtoff
Joseph | kickdebtoff
10 years ago

Poor service would be my motivation to close the account. We have three bank account’s open and we have talked about closing two of them.One of my must have for a bank- must open on saturday. We are also in search for a good savings account.

Andrea
Andrea
10 years ago

We switched banks on principle, during the financial crisis of late ’08/early ’09. We needed to combine finances anyway with a joint account and both had individual accounts with the same big British high street bank, but we were so disgusted by said bank’s lending practices and subsequent need for government bailout that we purposely went elsewhere to a smaller bank not motivated by corporate greed. Very happy with that decision.

Chris Farrugia
Chris Farrugia
10 years ago

I can tell you exactly what is making my wife and I change banks. Just a few months ago, I saw a charge for $5.95 on my account with Wachovia. I called to find out what it is and they said I must use Quicken or Mint.com to check my transactions. I said I did. They said there is now a $5.95/month charge for that. Now we’re going to head over to the local credit union and cancel our Wachovia account. It was just that simple. I don’t think Wachovia is so great that they’re worth $72 in fees per… Read more »

Kris
Kris
10 years ago

When I moved to this area, I opened a Chase account – mainly because my co-worker’s husband was a VP, and she said “we use Chase – you’ll like it!” Sure, there was a branch on every corner, but they charged me if used the ATM more than X number of times, and if I wrote too many checks, plus the service charge just for having an account . . . eventually, I closed that account and opened one with a “Community Bank” which I loved – until that bank was taken over by some Big-Box Bank, and I decidedly… Read more »

Fish Finder
Fish Finder
10 years ago

The wifey and I use USAA for some banking and all of our insurance and investing and they are great. We have been with them for about 25 years and have never had a problem with claims or service. Sweet wife tends to bang up her car every three or four years but or rates are still low. We do maintain our main checking at a local credit union where I can go in and look them eye to eye.

Danielle
Danielle
10 years ago

I have been with the same bank since I was a child, HSBC, but I have switched my money into higher interest savings accounts or investment portfolio options but the bank remains the same. I also use a credit union and basically anyone who gives and keeps me in a good interest rate. If the rate sucks and the hours suck,, I’m out. So far so good.

David
David
10 years ago

I used a local credit union for years with great results. However, as I prepared to move overseas, that wasn’t much of an option–so I went to Chase as they were in a correspondent relationship with our bank here in Ukraine. Interestingly enough, they have frozen the account because of their “loss prevention” department after I made a sizable money transfer last Friday–because it was done from here in Ukraine from their correspondent institution. I am trying to get it straightened out at the moment–as I told them, they were informed when I opened the account I would be living… Read more »

Paul
Paul
10 years ago

I switched banks about 20 years ago. I had an account with Lloyds (UK) and so did my mother. She was diagnosed with breast cancer, which metastasized into her brain. We organised an enduring power of attorney because she was slipping away. We took it to the bank to get access to her bank accounts, and they insisted we had to fill in one of their own forms rather than accept the power of attorney. We filled it in and sent it back. She couldn’t sign her own name by that point and so we signed on her behalf attaching… Read more »

Frugillionaire
Frugillionaire
10 years ago

I stayed with a small, local bank for a decade–until they were gobbled up by a big one. During that time, most of the independent banks in my area disappeared in acquisitions and mergers.

Now that I live abroad and travel often, I use a large bank with international services. Therefore, I’d say my main criteria for choosing (or switching) banks is convenience.

Billy Bob
Billy Bob
10 years ago

In the past 30 years or so, I have changed banks three times. When I was a child (11 or 12) I got an account at the local bank (Canada Trust) that my parents used. I loved that bank, open 8-8M-F and good hours on Saturdays. They were also the first bank iin my home town to have an ATM. When I got to University, I found that Canada Trust could not negotiate OSAP loans (student loans from the government of Ontario) and since my university was overrun with Bank of Montreal (BMO) bank machines and there was a branch… Read more »

DavidV
DavidV
10 years ago

This was maybe 5 years ago, but I noticed that my first bank was offering me 0.01% interest, and the bank across the street offered 2.5% interest (it has since gone down, but is still over 1%).

That was that.

someoneelse
someoneelse
10 years ago

Holy moly, I have had the same bank since 1983. Ok, not the actual same bank since it has gone under or changed hands 4 or 5 times since then, but the same physical buildings.

I just have checking with them but each new bank has kept the orginal deal in place (free checks, interest on balance, etc.) that is better than any of their offered deals.

I have not looked at other banks since I am happy with the one I have. Doubt I will change unless they do something like change my account rules.

Lizabeeth
Lizabeeth
10 years ago

I do not know that I would switch banks unless my current bank really messed up an account or something. I bank with Bank of America and I have been very happy with them over the years. When we travel, there is always a branch close by if we need it. I like the peace of mind that gives me. They may not pay the most competitive rates, but I love my local branch and the service they give me.

Ken
Ken
10 years ago

One thing important to note about credit unions is that many are part of a shared network of ATMs and branches. So if you switch to your local credit union you may have access to many more ATMs and branches then you might have realized. I described these shared networks in my post about supporting your local credit union
http://www.depositaccounts.com/blog/2010/01/resources-to-help-you-support-your-local-credit-unions.html

sandy
sandy
10 years ago

We have all of our savings, checking, CDs and now, our daughters have their checking and savings through our local bank, which is actually a very strong bank, and not likely to be swallowed up by the big guys. We have never paid a fee, because we have enough (with all accounts totaled)in their system. Our savings are about 1.2% at the moment, which is low, but I’m not going to change anything. When we lived abroad, however, we needed the availablity of an international bank, and we went with Citi. there is a Citi branch in every city we… Read more »

Patrick
Patrick
10 years ago

I have switched banks and opened new accounts several times. Initially it was for the free money bonuses. However, I have realized that despite the extra effort of opening and handling a new account – I have learned what else is available. I have broadened my horizons and by doing so I feel a little easier about switching to a bank that relates to me, or works for me better, more than just sticking with the same one I started out with.

Alexandra
Alexandra
10 years ago

I switched banks after my bank got rid of one of their rewards for being an Air Miles Gold card member, which was to pay no banking fees. I called them, explained that I had been with them for over ten years, held a decent amount of money in my accounts, and would like the fees waived. They refused. I asked to speak with a manager. She refused. I asked to speak to a customer retention specialist. I told them that I would switch banks. They said there was nothing they could do for me. I set up an account… Read more »

rxjohnk
rxjohnk
10 years ago

Here’s what it took for me… 45 times more interest! I have been looking around at options for better interest on my checking account. My current bank is paying a dismal 0.1%. So when I found a rewards checking account that was paying 4.55%, this was an easy decision to make. Instead of eating a meal out at the mexican place, like we did with the $25 in interest I made last year, I’m looking forward to helping pay for a vacation, pay down some debt or update my house with the interest this year. A little pain for a… Read more »

Jeri
Jeri
10 years ago

Ditto Bob! USAA is my…everything (financial). Didn’t used to be, but their OUTSTANDING customer service has completely won me over. I went through a (horrible) divorce a while ago and they gently and patiently walked me through it. I really can’t say enough about them; in a world of annoying phone trees (press 3 for more selections) it’s so nice to deal with a human who know her products and is pleasant!

Rob M.
Rob M.
10 years ago

I’ve used USAA for years, they probably have 75% of my accounts. The reason I am so loyal to them is their excellent customer service.

Rebecca
Rebecca
10 years ago

I recently (FINALLY) got my husband to switch banks! He was with a bank for over 20 years before I met him. I wanted to bank out of Wilmington Trust because of their rewards and the fact that if I have a problem, question, or concern, I know I can walk into our local branch and get straight talk directly from the branch manager. The interest rates are all pretty much the same around here, (although we do keep our savings in ING), but its a combination of things for me. As for choosing USAA, as a prior military member,… Read more »

Adam
Adam
10 years ago

I use ING and USAA. I’ve looked at local credit unions because I like the idea and one has interest rates higher than ING. What stops me is the ease of use. I do all my banking from my computer and I love it. I can deposit my checks on my scanner and pay all my bills online and transfer money easily. Local credit unions don’t offer that and that is what keeps me where I am.

Kevin
Kevin
10 years ago

Don’t think of joining a CU as helping a local business, think of it as helping yourself. You become a shareholder and are helping contribute to the health of the business you hold shares in.

My CU does a shareholder give back, where at the end of the year they give an extra couple points of interest on saving accounts and CDs. Thats a good investment and I doubt Chase does that, they give their stock holders the yearly bonus.

Greg
Greg
10 years ago

We switched from 5/3 Bank to a local credit union mostly due to customer service and partly due to principle. In 2008 I seed a $5 savings account that I hoped to start filling once we’re passed Baby Step #2 (see Dave Ramsey). On the one year anniversary, 5/3 closed that account and charged a $5 maintenance fee. No letter, no warning, no phone call…just took my $5 – all for the sake of “inactivity.” When I walked into the local branch, all they had to say about it was “It says in your paperwork that it would be closed… Read more »

Lisa
Lisa
10 years ago

As an original Bank One banker who was then absorbed by Chase and is now primarily an ING user, I say ease yourself away. Chase will eventually do something that pisses you off (as they’ve done to everyone in my family) that will remind you why huge mega-banks have some serious customer service drawbacks, and you’ll wonder why you patronized them for so many years. I use my Chase account as an in-person funnel to deposit money into my ING account because of the deposit-friendly ATMs, but that’s pretty much it. All of my savings are in ING where they… Read more »

lostAnnfound
lostAnnfound
10 years ago

We have been with our local CU for over 23 years now. They have two offices in our town and couple in other towns nearby. They offer many different services, including online bill pay. Opened an ING account two years ago to help automate savings for specific things (property taxes, vacation, etc) and this has worked out very well. I like the convenience of the local offices & the ability to access ATMs without fees through the SUM network.

Luke
Luke
10 years ago

A timely subject and one that has personal significance for me. I have banked with Alliance & Leicester (a British bank) for 6-7 years now, despite the fact that they have rotten customer service, poor rates and minimal functionality on their accounts. When I first started banking with them, I was eligible for one of their best accounts and was paying in £1000/mth or so. A relationship breakdown and a credit default later and their stupid rules meant that I was only eligible for a ‘basic bank account’ (no debit card/cheques/interest) – despite the fact that I’d funnelled maybe £50,000… Read more »

KS
KS
10 years ago

I loathe my local credit union – at one point, their service was so bad, I wrote a letter to their board of directors and got a condescending phone call from their CFO. But I don’t move my account because, you guessed it, no fees.

Baker
Baker
10 years ago

@Mrs. Money – While overseas we stayed in no place longer than a year. As such, we simply had travel insurance (we actually tried to get private health insurance in New Zealand for 6 months, but they told us we need to stick with travel!). Since coming back to the States, Courtney and I have had a fun time researching health insurance. I’ll strongly consider talking about this experience. 🙂 @Everyone – Wow, lots of great feedback. At least I’m not the only one in the boat. I should point out we did have ING Direct for around a year.… Read more »

Liz
Liz
10 years ago

I recently switched to USAA. It was a long process making the switch with all our automated payments / deposits. However, the one thing I did notice was that I get our deposits at least a day earlier than at my old “big boy” bank. Once I realized that…I was annoyed at the old bank that they were floating my money to their benefit. It took a bit to get used to an internet bank…but I really love it. I am so happy that I converted. Can’t believe I didn’t do it sooner!

SF_UK
SF_UK
10 years ago

I stay with my main bank – current (checking) account, emergency savings and emergency credit card for a number of reasons. The customer service is stunning – I swear they feed their phone-people happy pills, and they aren’t outsourced to millions of miles away either, so I don’t have to deal with someone who hardly even speaks English (sorry, but my last bank was that poor). They have an ethical investment policy which I broadly agree with, so my money isn’t being used to support the arms trade or oppressive regimes (again, bank-1, I’m looking at you). As a bonus,… Read more »

Little House
Little House
10 years ago

Convenience is the only thing keeping me banking at Wells Fargo. They have branches almost everywhere near where I live and in the west in general. I do have an online bank account as well for a higher savings rate (but not that much higher!) I have been tempted to switch to USAA since I have my rental insurance with them. But the thought of mailing checks and having to wait for them to reach them has made me hesitate. Looking at these comments, though, I might look into it a little more. I guess I’m in the same boat… Read more »

modF
modF
10 years ago

I too just switched to a local credit union after nearly 20 years. I was just so fed up with all of the new policy’s/fee’s and new management.

beforewisdom
beforewisdom
10 years ago

I switched out of a credit union because of convenience (lack of) and service.

There were only 3-4 branches/ATMs in my area.

The service was geared towards what pleased the employees rather than what worked for the account holders.

It was like banking with the Post Office.

Brian
Brian
10 years ago

I’ve maintained relationships with a few banks as sometimes a policy change can leave you high and dry. It helps that my early career was spent working for a couple of bigger banks, so those relationships were created somewhat organically. Expect to eliminate one of the relationships later this year. Although I’ve seen the light and am working my “debt snowball”, I received a major set back on rates even though I’m reducing my debt rapidly. Nobody gets to that and keep my business!

Matt
Matt
10 years ago

My wife and I just switched banks because our National City account was changing to PNC and we were going to have to switch all direct debit/deposits anyway since the routing numbers were changing.

Principle was our main reason for choosing a local bank, just to help the local community/economy.

It wasn’t too big a hassle. We had to both change our direct deposit, then change the automatic house payment, electric and water bills.

Jay
Jay
10 years ago

Until recently I was with a small Canadian bank that was owned by VanCity Credit Union (Vancouver), even though I don’t live anywhere near there. So it was all online, on the phone and by fax. I loved it. The fees were great (almost non-existant) and while the customer service went down hill in the twelve years I banked with them it was – even at the end – better than any bank I had been with before. Then they decided to get out of the banking business. They still have credit cards and GIC’s, but stopped offering savings or… Read more »

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