The New Year brings lots of opportunity for change and new beginnings. So today we will discuss your current banking relationship.
We recently had a client come into my facility from another state. They had just moved to Colorado and they had a few questions regarding financial institutions in the state. These individuals had just been through the Wamu (Washington Mutual) Chase merger for their home loan and had their personal accounts with BofA (Bank of America). BofA is not in Colorado and their home was sold so they were no longer customers of Chase. What are they to do? They did not want to bank with a large financial institution so we recommended a local credit union. Where do you bank? Are you tired of your bank but feel like you are in too deep to change? Have you outgrown your accounts? Are you being charged fees for services you do not use? Do you have more than one bank?
If you answered yes to at least one of these questions then it is time to complete a banking relationship review, you might have to change accounts and that may include changing banks. But before you run off and talk to a banker, you will need to be armed with some information so you will have the best account for you and not the banker. A little homework and self-analysis can go a long way.
Here are 10 questions to ask yourself:
- Do you have direct deposit?
- Do you use the ATM or Drive-up?
- Do you use a debit card, checks or cash?
- Do you keep a certain amount of money in your accounts (minimum balances)?
- Do you have and use a savings account?
- Do you sometimes need a line of credit for cash flow issues?
- Do you bank online and use online tools such as bill pay, mobile banking?
- Do you need multiple branches?
- Do you use cashier’s checks and money orders?
- Do you use safe deposit boxes?
These 10 questions are important because certain banking services will cost you money if you do not include in your checking account package. Yes, I said package, because it is almost impossible to open an account without having multiple services. In fact the more services you have the more free stuff you will receive from the bank. Banks want your entire banking relationship, keep this in mind. If you do not mind having all your eggs in one basket then this will be the most cost effective way to do your banking. Now if you like to spread the wealth then consider these 10 questions. Ask yourself how many times you use each service. When you prioritize each question then you can better select an account package that will serve you properly. Here are a few pros and cons of both large financial institutions and community banks/credit unions.
Big banks pros and cons
| Pros | Cons |
| large branch network | high turnover of employees |
| lots of products and services | higher loan rates |
| financial stability | lower savings |
| no flexibility |
Community banks and Credit Union pros and cons
| Pros | Cons |
| Higher savings rates | Few locations (atms) |
| flexible loan underwriting | Not advanced technology |
| low employee turnover | limited products |
| personal service |
I hope this helps in your selection of accounts and financial institution, if you have to change banks good luck and be sure to monitor you account. If you only need to change your current relationship then great because changing banks can be a pain in the neck.