|Back to main|
The Hunt for a Better Bank Account
10/18/2012 2:00:00 AM
By: Financial Planning Association
The recent rise in banks looking to make up forlost revenue caused by tightening credit regulations and a seemingly never endinglow rate environment has finally hit my doorstep.
Our family received a letter from a major U.S. bank where we maintain a few basicchecking accounts. The letter kindly explained that these previously free, no-frillsaccounts would begin charging a fee of $8.95 per account per month. Of course, thisfee could be waived if I was willing to use a debit card ten to twelve times perday between 2:00 and 2:15pm while standing on one leg or an array of other borderlinecircus acts.
While I'm exaggerating somewhat for effect, the bottom line was two small checkingaccounts were on the verge of costing over $200 per year just for the privilege.I had heard similar stories from clients and friends at other banks and thoughtthat perhaps there was nothing that could be done. Agreeing with 72% of those polledin a recent Bankrate.com survey that asked if people would change banks if feesincreased, I decided that the cost was enough to survey what else was out there.
So, in the search for a better bank account, is there an answer?
Fortunately, there is.
Depending on your needs, there are a number of options that might work for you. Ishould say first that, if you are already performing the tasks they require to qualifyfor the free account, then your best bet is likely to stay put, especially if youhave a good relationship with the bankers at your branch. Failing that, there aretwo primary places to go based on your particular needs.
Small, local banks and credit unions
Most of these institutions now have the same technologyas their larger counterparts in terms of online bill pay and mobile services. Manyhave also eliminated the concern about their lack of branches and costly ATM transactionsby either participating in a network of ATMs where you can withdraw money fee-freeor they will reimburse your ATM fees up to a certain amount each month.
There's still no such thing as a free lunch. It can be a hassle and a time drainto change banks. Transcribing online bill pay payees, ordering new checks, notifyingdirect deposit or automatic payment vendors are just a few of the hoops you haveto jump through to make a move. The banks know this and upping their fees is theirway of betting that you won't make a move. If you take the steps in advance to selectthe bank that is the best fit for you, it will be well worth the effort and saveyou money, stress and time in the long run.
Chip Workman, CFP®, MBA