Facebook Rss Twitter Youtube MSN

Too many people stick with a bank that they hate because they don’t know there are better options—and because they dread the hassle of switching their money.

In today’s post, I’ll cover how to shop for a new bank or credit union. In this post (click HERE), I write about ways to make the switch as painless as possible.

The best fit for you will depend on how you use banking services and your priorities.

Start by looking at your transactions for the last three months or so. What was the lowest balance in your checking and savings accounts over that time? If you constantly run on fumes or close to it, you’ll want accounts with low minimum balance requirements or that waive minimums when you arrange direct deposit of your paycheck. (My credit union requires a $1 minimum for its basic checking account. Big banks may require a $500 to $1,000 minimum balance to avoid a fee unless you have direct deposit.)

Cast a wide net. Don’t limit your search to name-brand banks. Community banks and credit unions can be good options as well. Move Your Money can help you find top-rated community banks by ZIP code, while Find a Credit Union and CULookup offer similar services for CUs. Community banks are covered by the FDIC insurance that applies to bigger banks, and most credit unions are covered by the National Credit Union Share Insurance Fund, which like the FDIC is backed by the full faith and credit of the U.S. government.

Check your target institution’s Web site for the closest branches and ATMs. You can always get extra cash at a grocery store with a debit card, but most people like to have a fee-free ATM and a branch or two close to where they live or work. Credit unions usually belong to the Co-Op Network, giving you access to more than 28,000 fee-free ATMs across the country.

Also check interest rates for checking and savings account. Getting any interest on your checking at big banks typically requires a huge balance ($10,000 and up), but some community banks offer decent rates on so-called rewards checking accounts. Get all the details before you sign up, since a certain number of transactions and a minimum balance are typically required.

Savings account rates vary as well. My big-bank savings account offers a fraction of 1%, while my credit union currently offers a 7% return on the first $500 deposited.

Test their customer service. Don’t just check them out on the Web. Call and talk to a human to ask questions, so you can see how you’re treated. Then, before you commit, visit a branch and ask some of the same questions again in person. What an institution promises and what it actually delivers in customer service can be worlds apart, and there’s nothing like face-to-face contact to help you decide.

What to ask (and make sure to write down the answers so you can compare your options):

  • What are the minimum balance requirements (if any) for each account? What monthly fee will I pay if my account goes below the minimum or if there is no fee-free minimum?
  • Do you reimburse for transactions made at other banks’ ATMs? If so, how many fee-free transactions can I make each month?
  • Do you charge to talk to a teller? If so, how much?
  • Do you offer online bill pay for free? Is there a limit on the number of bills I can pay?
  • Do you charge for paper statements? If so, how much?
  • What do you charge for transfers to outside accounts?
  • Do you offer overdraft protection? How much does it cost? (What you want is true overdraft, which links your checking account to a savings account, line of credit or credit card in case a transaction exceeds your available balance. Don’t settle for “courtesy overdraft” or “bounce protection,” which can cost you a fortune in bounced-transaction fees.)
  • If you use Quicken, QuickBooks or other personal finance software, ask about fees for those services.
  • If you frequently send money out of the country, find out how much is charged for that service.

Next up: How to say goodbye.

Related Posts

Categories : Liz's Blog



The right bank can make or break your finances. Well, maybe not break them, as long as you have at least a small amount of financial know-how, but some banks can help you achieve your goals much faster than others, especially when it comes to saving money.


Amen to that. Thanks for your comment.


Liz, as always I appreciate your article, however still feeling “snake-bit”. After hearing so many good comments, I was excited to be able to take advantage of our local CU for debt consolidation loan in late Nov. They offered a fixed 9.99% rate. Customer service was wonderful. However, my first statement included a statement that said, “As of Feb 19, 2010, the rate will now be 14.99APR”, with no explanation as to how the APR will work. I feel taken, rate-jacked!! This is more than my cc rates! We have great credit, never been late. The goal is to pay off the debt, but now more interest as well. So sad!! I wrote a letter to the CEO letting him know our disappointment and we are not accepting the new rate. I’m hoping our non-acceptance is accepted. Really too bad, it’s hard to find trustworthy help these days! It definitely has been an eye opener!


Great post Liz and a much needed post for consumers. Another area that a consumer may want to consider is what financial products a bank offers. If they have an idea of what type of products they may need now or in the future like credit cards, secured/unsecured loans or personal lines of credit it will prevent them from having to find out later that their bank doesn’t offer what they need.

Keep up the great work!


Great point, Marco. My CU has business checking and savings account, but no lines of credit–given how important those can be for smoothing out cash flow, that’s a big deficit for a business owner. On the other hand, their rates for personal loans and auto loans absolutely rock.


That’s really disappointing, perfectpacer. CUs definitely aren’t perfect, although I hear a lot fewer bait-and-switch stories about them than about the big banks. I hope your letter gets a response.


(1)I actually had to switch from a CU to a bank but not one of the 6. America’s First CU didn’t recognize my home business as income. I found this out when we applied for a second mortgage to pay off some other credit cards a few years back. They actually cancelled my credit card, (perfect payment record) and closed my account.
(2)I’d had a good payment record with American Express for over 10 years when I decided to open a Rewards card account. I screwed up putting the information on my bill paying software with my bank so my first payment didn’t go through. They told me that they would have to “punish” me for that with a 30% interest rate for a year, even with a good payment history (and I asked for a supervisor). So I shopped around and B of A was the ONLY lender willing to give me a 0% for 12 months card. Not my bank, Discover, or any other local banks, so I gave them the business.
(3) I fly twice/year to see my dad so when I needed to make a big purchase in November, it only made sense to get a Citi American Advantage card and get a free flight out of it.
So I’m actually doing business with 2/6 big banks but it’s not because I didn’t look elsewhere.


Your experiences show there’s no one-size-fits-all solution. Amex, for example, typically tops customer-satisfaction surveys, but that doesn’t mean everybody’s pleased with how they’re treated. What’s important is knowing that you have options and exercising that power of choice when you’re not happy. Thanks for your comment.