Bank Better: How to Switch Your Checking and Savings Accounts

How happy are you with your current banking situation? Are you getting real value out of your checking and savings accounts? Or do you feel like you’re getting nickeled and dimed? 

Today we’ll go over how to find a better banking option and how to seamlessly move your money! 

Why It Matters Where You Bank

These are all important to your financial health and making progress on your goals, however we left the biggest piece of the puzzle last – your day to day bank accounts. 

Your check and savings accounts are the backbone to your family’s financial system, but for most of us, it's almost like an afterthought.

Much of this goes back to how we chose our accounts in the first place.

For my husband and I, with our first accounts, it was based on who we were already banking with. And at the time we had bank accounts with two of the major banks, we had opened student checking accounts.

When I say they were basic accounts, that's exactly what they were.

Honestly, we just settled with it for way too long. After getting frustrated with the horrible customer service, ridiculous fees and not seeing any real progress with our financial goals. We decided it was time to change.

We moved our money to an online bank and credit union and i have to say we are so much happier for it.

We feel that our banking partners are actually partners that they're helping us reach our financial goals faster and make our lives easier with managing our money.

So if you feel that way about your bank or credit union, fantastic.

However, there are plenty of families that feel like their banking options are hurting them rather than helping.

According to a recent Magnify Money survey, 68% of consumers are frustrated and feel like their savings isn’t growing. When you consider that 18% of those said they get less than .05% APY, it’s understandable.

What makes it worse are those minimum balances and fees added on their accounts. 

Bankrate reported that the average maintenance fee on a checking account that earns interest totaled $196.20/year

So if you’re feeling squeezed, you probably are. That doesn’t have to be the case though. 

With 2021 winding down, now is a great time to set the pieces up for you to have an incredible year in 2022.

In this episode, we’ll go over: 

  • What to look for in your next bank or credit union
  • How to move your money and switch accounts (and deal with a reluctant spouse)
  • How to set up your new accounts for your best year ever

Are you ready? 

Let’s get started! 

Resources to Easily Manage Your Money

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

We’ve been Coastal members for a few years have been happy with their services.

Find out more about what Coastal offers here!

How to Find a New Bank or Credit Union

Before you start comparing options, it's important to focus some time on defining what you need out of your bank accounts, your current situation and your goals.

If you're not sure where to start, let's cover some essential services you need to have.

Secure and Reliable Access

The first is secure and reliable service. You need to have access to your money when you need it.

First off, only look at banks or credit unions that are either FDIC or NCUA insured. Your money needs to be covered and protected.

Second with so many of us banking online, especially these last 18 months or so. Make sure that wherever you bank has an easy to use mobile app and site.

For example, for some of my clients where I do freelance work, I may get paid by check. In those cases, I need to have mobile deposit setup with my credit unions app.

Fantastic Customer Service

Second key area is making sure that you were bank or credit union is customer or member focus.

I know, currently the low interest rates on savings accounts aren't really helping you grow that financial cushion. However, I still noticed there is a difference with what you can get if you're willing to shop around.

Considering that we're living during these times of low interest on savings and checking accounts, it's especially annoying to hear from people in the community, getting hit with needless fees or having their banks have high minimum balances. You're not really getting much value from your accounts.

Since no one is perfect mistakes will happen. It's key to get that cleared away with great customer service.

This is an area where both of our old banks failed. We had problems with money coming out of the wrong accounts and even had a problem where someone else's credit card account was showing up when we logged in.

We immediately called in to report that so he could get fixed, but instead of working with us or explaining that they were having some technical difficulties, they denied that there was a problem.

I don't know if it was something they couldn't see on their side, whatever. Not only did that frustrate us, but it worried us about the security and privacy of our accounts.

(But it looks like we skipped some of the worst problems.)

Now you know why we left.

Keep in mind we've also had a unique opportunity with this pandemic to see what our current banker credit union is doing for their customers and members.

As members of Coastal Credit Union, we saw how they gave back to the community, to the organizations that were serving those that were hit especially hard with the pandemic.

They also made arrangements to modify loans, pause payments on credit cards, Basically work with members to keep them financially whole during this difficult time.

Competitive Rates

Finally, we want our banking partner to be competitive with rates.

We want our savings put to work by earning more. On the other side, when we got our mortgage for our current house, we wanted to get a great deal.

So there you have it. That's our list and how we rank them, but you may have a slightly different order. In different priorities and that's fine.

Remember, these bank accounts should be serving you and your family's financial goals.

Alternative Options to the Big Banks

Now that you've created your list and you know exactly what you're looking for, it becomes much easier to start comparing your options.

Many of us are familiar with the big banks. But there are three alternatives. I think you should consider when your bank hunting.

Credit Unions

Credit unions offer many of the same services as banks. You have your checking and savings accounts. You can apply for loans and mortgages and in a few cases, some credit unions offer small business accounts.

So what's the big difference between this big banks and credit unions? The main thing is how they're structured.

With a bank, they serve their shareholders and investors. When you join a credit union though, you're not only a member, but part owner.

How that translates for you is that while the bank gives their bonuses to the investors, credit unions return their surplus income to their members.

That can show up in a few different ways:

  • lower interest rates on loans.
  • lower or minimal fees with your accounts
  • higher interest rates with your savings.

We've experienced this firsthand. As you heard at the top of the show, Coastal Credit Union sponsors this podcast. However, we've been members with them for years before that happened and we have our mortgage through them.

For us, when I looked at the numbers, we're coming out ahead compared to the old banks we used. (We also had a mortgage with one of them.)

One feature we immediately noticed and appreciated was the annual member bonus. It's based on the accounts we use.

It's a nice deposit every year. It feels good to be rewarded for maintaining good financial habits.

If you're in the Raleigh Durham area, I definitely recommend checking Coastal out but even if you live outside this area, a credit union could be the right fit for you.

Community Banks

If you prefer personal service where you can go inside of a branch, community banks might be the best choice for you.

I know some families it's really a chore to deal with those automated phone systems. So having a local spot you can visit is crucial.

Instead of feeling like just an account number with some of the bigger banks, a community bank can give you that personal attention that you may prefer.

Online Banks

Years ago, there was a lot of hesitation for people to go with online, only banks. That seemed to have cleared up, especially in the past year or so.

Because online banks don't have brick and mortar branches, many of them can offer more competitive rates and benefits like low or no minimum balances on their accounts.

So if you are hunting for a better banking option, please consider those alternatives, run the numbers and find a partner that makes sense for your goals and your values.

How to Seamlessly Switch Banks or Credit Unions

While the process of switching banks or credit eons, isn't really complicated. For many families it's stressful. Again, these are our day to day accounts and much of our financial system is based on them. We want to make sure that the bills are taken out correctly, the transfers are made. As needed and payments get out on time.

With your new accounts open, let's start with outlining the steps.

The first one is map out your current system. Which accounts need to be paid and when? How much goes into savings, your retirement accounts, other investments and financial goals?

You also want to make arrangements with HR to move your paychecks so that they deposit into the new accounts. Third step is spend an evening or maybe a weekend. I don't know how many accounts you have between the two of you. And start switching over and scheduling the bills, transfers and payments with the new accounts.

And then after things are running smoothly, you made sure that everything transferred correctly. You can go ahead and close the old accounts. So that's the general overview.

Let's jump into each step and see how we can make this transition easier. The first is map out your current system. And this is something that is handy to have whether or not you're switching your bank accounts.

Having a big picture of you, of how your money is flowing gives you an idea of where you can improve and optimize.

This may be an area where having a money app. Can be incredibly helpful. Because everything is already laid out. You can dig in and drill to the transaction level to make sure that you know exactly what payment is going out and when and from which account.

The second is working with HR to make sure you have the right forms. So you can make that transition so that your payments go into the new accounts.

If you get paid every two weeks, one way you can smooth out this transition. Is waiting for a month where you get three paychecks.

They'll use that extra paycheck to open the account, put the money in. And then they start switching the deposits over. You can also time it if you're anticipating a bonus or perhaps a tax refund.

The third TIF can be a bit tedious because now you're going to be switching over, scheduling the bills, transfers and payments to the new accounts. So set aside in eating, or if you want to do it bit by bed over a weekend. Go ahead. But make this a low key evening or weekend. Order in if you have to, so you can be as relaxed as possible while you make the switch.

The last step is closing the bank accounts. And you might be wondering how long should we keep our old counts open. It really matters on how complicated your financial system is and how many accounts we're talking about. But you would want to wait at least a month to make sure everything is taken out correctly before closing. Typically, what happens if you miss a bill or two, they will contact you for the updated information.

You can also review things weekly to make sure you haven't missed anything as well.

Like I said, it's not complicated, but sometimes the process of moving things over just seems overwhelming. So breaking it up step by step makes it a lot easier.

Another snag that you can have with the switch is your spouse. If they're reluctant with making what they feel is a drastic move with your money.

One suggestion that I usually give is moving over your savings account at first. Let them see that things aren't as complicated as maybe they imagine.

You can then wait to one of those opportune times, like I mentioned, getting three paychecks a particular month or some extra income to then make the transaction with the checking account. Best wishes on this new change!

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