If You Can’t Get These Features, Start Shopping for a New Bank (52/365)

Over the last few days, we’ve talked about several features your bank should have: compatible hours, few (or no) fees, solid interest, and a large ATM network. On top of that, I’d add robust online banking as well.

The question then becomes what do you do if your bank doesn’t offer these things? I’d suggest shopping for a new bank. Here’s how.

If You Can't Get These Features, Start Shopping for a New Bank (52/365)

First of all, I’d check out local banks. After all, access to a real person when you’re trying to straighten out an issue can be valuable. Investigate all of the banks in your area and find out some key information about them. What are their account offerings? What kinds of interest rates do they offer? Do they have a lot of local ATMs? Do they have reasonable hours? What kind of monthly fees are charged to their accounts?

That doesn’t mean that you should leave online-only banks like ING Direct out of the loop. While they don’t have the advantage of an actual location near you, they do offer strong features in other areas – strong interest rates, virtually no fees, very robust online banking, and usually a large fee-free ATM network. If you find your local banks are lacking in some area or another, investigate some of the online options.

I actually use multiple banks. ING Direct has served me very well for aiding with banking related to the finances of The Simple Dollar, as well as some personal banking. Their online banking is very robust and useful. I also use a local bank for many services, as I can conveniently stop there and almost every ATM nearby is fee-free for that bank. This two-tiered approach allows me the best of both worlds.

Switching banks can be a pain. I suggest following a simple four-step plan.

First, open up the new account at the bank you’ve selected. This is usually straightforward.

Next, transfer your direct deposits and automatic bills to the new account. Do not transfer the balance in the old account. You should leave some significant amount of cash in there so that if automatic bills are deducted from that account, you aren’t hit with overdraft fees.

Then, check your old account regularly to watch for deductions. You will probably forget one or two of them if you have any automatic bills set up. When you see one go through, switch that transfer to the new bank.

Finally, after several months, close out the old account. Transfer the money from that account and have the account closed. You want to hold out for at least a few months to make sure that you’re not forgetting any automatic transfers.

Switching banks is often a financially strong move. It can get you away from constant ATM fees, maintenance fees, effort spent trying to get banking business done, and other such difficulties, saving you time, effort, and money.

This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere. Images courtesy of Brittany Lynne Photography, the proprietor of which is my “photography intern” for this project.

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16 thoughts on “If You Can’t Get These Features, Start Shopping for a New Bank (52/365)

  1. Icarus says:

    The ING account has been mentioned before. Any of the frequent commenters here have feedback on it? Good, bad, stay-away?

  2. Mister E says:

    I’ve used ING for years for savings and just last year opened a chequing account once they became available in Canada.

    My experience has been great. There really are no fees and no minimums on savings accounts and very few fees on a chequing account (none at all for daily banking needs). Customer service has been good on the occasions that I’ve needed it.

  3. Angie says:

    I heard ING was being bought by Capital One.

  4. lurker carl says:

    ING Direct USA is in the process of being purchased by Capital One, I don’t think the deal has closed yet. ING International was anxious to divest itself of the US arm due to the overwhelming number of home mortgages on it’s balance sheet. How or if ING Direct changes once Capital One takes over remains to be seen.

  5. Vicky says:

    I have ING. It has been purchased by Capital One, but nothing has changed.

    Free checks, free online bill pay, they’ll even mail checks for you. Free Person 2 Person payments that actually are instant.

    Only thing that sucks? Deposits. If you do direct deposit and never have cash to deposit, no problem. You can mail in checks, although supposedly they are working on making it easier…

    Oh. And No overdraft fees. They give you a small line of credit – I overdrafted once, and I paid all of 3 cents in interest for the incident.

  6. Derek says:

    ING Direct is awesome. Hopefully nothing changes with the Capital One buyout. Deposits do suck but they sent out an email a day or two ago that soon you can deposit from your phone or desktop. Customer service is top notch.

  7. Icarus says:

    thanks everyone. looks like the interest rate is better than most banks in the states. Any thoughts on checking versus savings? Still not sure why those are even still separate in this day and age, just make it a hybrid and get on with it.

  8. Julie says:

    The picture has a red tint because of everything in the background.

  9. Riki says:

    The picture has a red tint because the image was white-balanced (probably automatically by the camera) on the comparatively blue computer screen. Incandescent lights are very warm and the background is under-exposed so it looks particularly red.

  10. michael says:

    ING Direct was finally purchased by CapOne on 2/17/12. Just got an email on it. I believe they have to find a new name for the service in the coming year due to ING(parent company) being financial behemoth in Europe.

    They also promise e-deposits, as I reckon they held off pending the takeover completion.

    Love ING Direct, hopefully there are only those few improvements and not a wholesale drastic change to a very innovative web banking outfit.

  11. Angie says:

    According to news reports, “ING Direct” will be gone within a year.

  12. Cheryl says:

    I would add that you should check if the bank or credit union supports direct downloads to your money management software. We had downloaded direct to Quicken and Quickbooks for years, never even thought to ask. Our new credit union only supports downloads to another money management program, not Quicken. When I asked why not, they said their software was not compatible. I really hate entering all those debits!

  13. Ted says:

    I’m a little disappointed that this series of posts has not really focused on credit unions. Credit unions often have far fewer fees and better rates on both savings and loans than banks. The biggest downside to them historically was a lack of ATM’s, but my credit union now contracts with US Bank so its members have access to any USBank ATM in the country.

    I believe in looking for consistent value in financial services (i.e., not always chasing the hot bank with the current lowest rate…they usually don’t last long). I have never found a for-profit bank that provided that value and have always returned to a non-profit credit union.

  14. Tom says:

    “ING International was anxious to divest itself of the US arm due to the overwhelming number of home mortgages on it’s balance sheet. How or if ING Direct changes once Capital One takes over remains to be seen.”
    …er, I don’t think that’s entirely correct. I believe they sold “ING Direct” because I believe the parent company (ING Intl) had MBS issues and were forced to raise capital by restructuring. ING Direct is one business they had that could be easily sold for a premium.
    Changes when Capital One takes over, probably will be minimal at first, but will be worth revisiting in 6 months or so after the deal completion (2/17 according to another poster above.)

  15. Pearl says:

    Thanks for the details on how to change banks. I bank with a large/national bank currently, have no fees, and am in general happy with their services and perks (like online bill-pay,rewards, etc.). I have a savings account at another large bank–because the savings rates are better and their 3-day delay in tranfers means I have to be mindful about moving $$ around (it’s good that it’s not quick and easy). Recently, however, I’ve been wondering if I should have a smaller, local bank that is more personal: I want to get a car loan soon, buy a house sometime within the next 2 years, and wonder if a smaller, personal bank will make this easier–rather than the impersonal large-bank world. What would you advise?

  16. Shelly says:

    I’m surprised nobody has mentioned Ally as an alternative to Ing Direct.

    My husband and I switched to Ally when we moved 2 years ago and realized our old bank wasn’t available in our area. We looked into local banks and credit unions, but nothing could match Ally’s offerings.

    I love that I can go to any ATM in the US and know that my fees will be reimbursed. Paper checks are free — Ing charges $5 for 50 checks now. Cash back when you use your debit card at participating Ally Perks stores (and the deals are often better than the cash back I get on my credit card). And deposits are super-easy with their online check depositing — no need to mail anything in. Customer service is available 24/7 and isn’t outsourced.

    Interest rates are higher for checking, too. Currently, Ally’s checking account has 0.40% interest; Ing has 0.19% (unless you’d like to keep $50,000 in your checking account, but who really wants to do that?)

    We’ve had a great experience with Ally. I’m sure Ing is great too — just saying there are other options out there for online banking, so do your research! :)

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