The One Hour Project: Switch Checking Accounts

For a long time, I kept my primary checking at the local branch of a large international bank. Over the years, though, they slowly bled me with lots of little fees here and there: a monthly maintenance fee, a $2 charge on pretty much every ATM use, and overdraft fees that were sometimes triggered by the other fees (yes, at least twice, I was hit by an overdraft fee when maintenance and ATM fees emptied my account).

After estimating that the fees were costing me almost $10 a month – and also considering that I was not earning any interest on the balance – I made the move to switch my primary checking account to ING Electric Orange, which is basically fee-free and offers a 3.5% APY. It’s worth the constant money savings to switch your primary checking account to a bank that’s happy to have your business and treats you well – a $20 swing per month for me was quite nice.

When is it Time to Switch Checking Accounts?

Evaluate your current checking

Do you end up losing money every month because of your checking account? Are you really annoyed by fees or customer service? Those are usually the signs that you need to be looking for a different checking account. I’m often amazed at how atrocious the checking account for most people really is.

Make a list of required and desired checking account features

Do you need to be able to write immediate paper checks? What about ATM use? Do you need a check card? Do you desire a return on your deposits? Do you need a local branch to conduct business in? Everyone’s needs are different. I found that I rarely used my local branch and was writing almost no paper checks at all, for instance, which meant that I could focus on no fees and a return on my balance.

Go checking account shopping

The checking account navigator at Bankrate is very useful for this. Find an account that has all of your required features, plus is strong in the optional areas.

Switch!

I wrote a detailed guide on how to switch from one checking account to another, based on my experience switching to ING Electric Orange.

Making a switch to a checking account that treats you better will not only reduce your frustration level, but can put some coinage in your pocket each month.

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  1. You should check out USAA – I love em! Not only do I get interest checking with no minimum balance, but they also reimburse up to $15 (Or is it $20) per month in ATM fees, and don’t charge any of their own.
    Need to mail in a deposit? No problem, they supply you with free postage PAID envelopes and not only that, your checks are free too.

    Though to be honest, I’ve always FedEx my deposits to them because we I need to deposit something, it’s usually $5000+ and I don’t feel comfortable any more with USPS.

    Anyway, go check em out.

  2. James says:

    Good advice. It can save a lot of money pretty quickly, without really having to do anything. And it feels great to finally be able to switch away from a bank that you feel has been nickel-and-diming you for years.

    Beware, though. In switching to a Wamu Savings & Checking combo, I decided I might as well use my checking account for day-to-day activities, and rack up interest while my money was in the account.

    However, all banks seem to charge an “excess activity” fee for more than 6 transactions per month in a savings accounts. I just found this out today and it’s something that can be easily avoided. I wrote a whole spiel on it at http://www.boiling-frogs.org/2007/09/21/washington-mutual-excess-activity-fdic-regulation-d/ .

  3. Stephen says:

    My wife and I are actually just in the middle of switching over from Comerica to ING. I am tired of the fee’s and misc crap that they put us through. And I am tired of being paid 1% interest on my savings account and even less on our checking account. So once my last check goes in this week we are going to pay the few misc bills for the month and start the switch over.

  4. s says:

    A note about USAA: it’s only available to those that “qualify”. I believe the requirement is that either your parent or spouse is a member (this can go on for generations, as once you are a member, you can spread your membership too), or you are active military. They also have great insurance and loans :).

  5. Thad says:

    I have had savings accounts at ING for a few years now, and love them.

    But for my checking account, I went with http://www.presidential.com, which has a checking account that pays 4.50%APY (up to $25k). Minimum balance is $1k (you do need $1.5k to open it).

    Their website is a little dated, but their online bill-pay program is fantastic.

    Just my $0.02.

    Thad

  6. MVP says:

    We have a checking acct with a local credit union that has several branches in our region. I never get hit with the fees you describe, they’re open on Saturdays and until 6 p.m., and the employees are always nice! A couple weeks ago, we accidentally bounced a check, which triggered an overdraft and the accompanying fees. Once I realized our oversight, I called them and they reversed the fees since we don’t have a history of bouncing checks. Think B of A would do that?! I’d highly advise ditching the corporate banks and going with a credit union.

    Also, we have two ING orange accounts for savings and love them too, although I’ve never used the check-writing features. They link to our credit union accounts, so we can transfer money in a jiffy whenever we need to.

  7. Mrs. Micah says:

    Hmm. I’m going to stay with mine just a little bit longer, because I’ve earned points on my debit card over the years and can almost cash them in for a $25 B&N gift card. But by next year I’ll be looking for another one.

  8. Margaret says:

    I have a chequing account at a credit union. My husband went and set it up for us. However, the monthly fee was really high. I finally got fed up and opened up a different account with a major bank (we have other business with them, so it is convenient to be able to switch funds between accounts), and went in and reduced the account to the bare minimum and basically stopped using it (we didn’t want to get rid of it completely because a couple times a year we get a cheque made out to both of us, and I was told at my other bank that we couldn’t deposit those cheques into our individual accounts — although one time I was doing the banking and I accidentally deposited a cheque made out to me into my husbands account (ATM machine), and when I called the bank, they told me not to do anything about it, and the would just get processed into that account and we could transfer the money after — doesn’t really give me a lot of faith in the banks and the chequing system). Anyway, when I went in to reduce the plan to pay as you go, since I knew it would only be about one transaction a month, they told me that we were signed up for the most expensive plan. So had I looked into it sooner, I could have saved a couple hundred dollars in bank fees over the years. However, if their account manager had spent any time at all asking about how we used our account, she would have known that the plan she put us in was not appropriate for us, so I don’t feel bad about switching to the other bank.

  9. Mariette says:

    I have the basic free checking account with WAMU and have been very happy with it, I’ve had it for years. I didn’t know that there were checking accounts out there though that generated interest. Thus proving the need for us all to reevaluate our financial situation from time to time so that we can learn about new things on the market which might be better than what we are doing. Thanks for the tip!

  10. Susy says:

    I have always had a small town bank checking & savings and loves them. However about 2 years ago National City bought them out and I HATE NC!!!

    So I just got fed up with them and switched to ING orange. I love it. The bill pay is great. Whenever I get a bill I go in and set it up to be paid and never have to think about it again.

    However balancing my checkbook the month after switching was a bear (we do own a business though so our checking is a little more complicated than most).

  11. Lisa says:

    I love my ING Savings accounts. I looking into the ING Electric Orange, but was put off by the lack of check writing ability. I know you can write the electronic checks — but sometimes I need to be able to write out a check and hand it to someone (i.e. Deposits on real estate transactions).

    For those of you who switched, how did you handle that?

  12. 2million says:

    Im not convinced an 100% electronic checking account is the way to go for me yet. I have too many monthly checks that need depositing.

    If all you have is your electronic payroll they seem to be perfect.

  13. Amanda B. says:

    B of A is the devil! I was so happy when I dumped them!!! I am with Navy Federal and I love it. If you have the ability to sign up with them, I’d take it. I also keep my medium and long term saving in ING. B of A was such a huge source of stress for me. I actually would wake up thinking about how much I hate my bank. I would see someone paying with a B of A card and would go off on this long lecture about how they are an evil company. Maybe I was jaded, but I am much less stressed now that they are not part of my life. It really is like I got out of a bad relationship.

  14. Nate says:

    Since no ones mentioned it yet another great free checking is Fidelity mySmartCash account. You don’t have to have a brokerage, unlimited free paper checks, unlimited ATM reimbursements, no minimum, 3.5% interest rate. And I’ve been nothing but impressed with Fidelity’s customer service.

    We have ING Orange, but I write paper checks each month, so having paper checks is a necessity.

    Link: http://personal.fidelity.com/accounts/aong/sca_learn.shtml.cvsr

  15. Michael says:

    I currently have a Bank of America account and an ING Checking account. I’ve kept my BoA account because I need to write checks from time to time and also like having access to their ATM network. However, I keep most of my money in the ING account for online purchases and bill paying.

    With that said, I’m not particularly happy with my BoA account. Are there any banks that offer a similar overdraft protection to ING but also give one the ability to write checks?

  16. Natan says:

    I have referrals for the ING sign-up bonus of $25

    email me and I’ll send you the link

    “liltroz at gmail dot com”

  17. Adam says:

    I recently swtiched to ING Electric Orange, and so far, I love it. My only issue is the lack of paper checks, which is a pain because my apartment complex only takes checks and money orders. I left my Wachovia account open so I would have an easy place to deposit any checks I get, so I think I’ll just transfer the money over to that account and write a check from there.

    Other than that, its awesome! The Billpay is super easy, I have a significant cushion in case I screw up and overdraft (just a few cents of interest instead of 35 dollars worth of fees) and the customer service number connects you to…wait for it….AN ACTUAL PERSON! No computer menu at all!

  18. Andrea says:

    In Canada there’s also PC Financial. I switched all of my accounts to them a few years ago already because I was tired of paying $3.50 a month just for the “privilege” of having an account at my former bank.

    I don’t pay fees for anything except if I overdraft, which of course I’ve avoided completely since I’ve started budgeting better. I haven’t looked back since (except to also have a savings account at ING for the higher interest rate).

  19. J says:

    I don’t know if anyone is aware of this but HSBC offers savings accounts that always seem to bear one of if not the highest interest rate in the industry. I have had them for years and they have always been at or above what ING was paying in interest.

    Incidentally, to Adam, according to my reading regarding the ING Electric Orange Checking account, it has an automatic overdraft protection with no fee incurred for the overdraft. Wachovia does the same thing.

    None of my employers have ever done direct deposit so I stick with a local bank. Also, I have found customer service the most important thing for me when it comes to … well, just about anything.

  20. Adam says:

    To J,

    Wachovia charges 35 dollars per overdraft. Even if you deposit money for overdraft protection there’s still a 10 dollar fee for the convenience. I’d rather pay a few cents in interest if I happen to go voer.

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