Bank Not Measuring Up? How to Tell and What to Do (by NerdWallet)

After eight years as a customer at a big bank, Victor Villegas cut ties over an $18 fee.

“I looked at the benefits that other banks offered,” the instructional designer in Dallas says. “I realized that I was getting the short end of the stick in the banking relationship.”

It’s not a move many people make. In 2014, the EY Global Consumer Banking Survey reported that 60% of customers had no plans to move accounts within the next year, and it wasn’t always because they were satisfied. For example, 17% said that it was too difficult or time-consuming to change banks.

But not switching could be costly. If you haven’t looked at what your financial institution’s competitors offer, you might be getting the short end, too.

» MORE:How to switch banks

Take stock of your financial needs

Your financial needs can change with time, and you won’t know if your bank is still the best one to meet yours unless you browse your options. You might find free accounts, low fees, more promising savings rates or better budgeting tools.

According to the same Global Consumer Banking Survey, 32% of customers who had closed bank accounts within the last year did so because of their bank’s rates or fees. You might also want to change banks because:

• You got married (or divorced). It’s a fresh start, so try something new: a joint account at a bank that meets you and your spouse’s needs or a personal checking account with the features you want.
• Your bank’s customer service fails to impress. Walk away if your neighborhood branch closed down, the call center’s hours don’t work with your schedule or you’re consistently met with a poor attitude.
• Your bank doesn’t have your must-have features. If your bank lacks a decent mobile app, mobile check deposit capabilities, person-to-person money transfers, a digital wallet or budgeting tools, those are all valid reasons to leave.

You can also return to your old bank later. Charlie Lucero, a registered nurse in Santa Clarita, California, left his bank because he didn’t think he was properly informed about the fees attached to his account. He returned because his job suddenly qualified him for a free account.

Your relationship with your bank doesn’t have to be long term. If you’re unhappy or think you’d be happier elsewhere, move on.

» MORE: NerdWallet’s best checking accounts

Research your options

And you don’t need to switch to another traditional bank. Technology gives you alternatives, such as online-only banks. These offer low fees, high interest rates on savings and strong digital experiences — but they don’t always accept cash deposits or have physical branches.

Some consumers also turn to prepaid debit cards. They have fees of their own, but a 2014 study by Pew Charitable Trusts reports that about one-third of prepaid card users closed a checking account because of overdrafts or bounced check fees.

Villegas created a system that works for him. He now has accounts at two banks for different purposes: an online bank for perks and a brick-and-mortar bank for its large ATM network.

You can do the same — or use another strategy. Feel free to mix and match institutions as you please.

Open your new account

One thing to note: Make sure changing banks will solve your problem. For three years, former bank teller Karlie Flores watched customers switch banks when banks changed policies in response to federal regulations. According to her, some customers didn’t understand that they would be met with the same requirements at any bank.

Once you’re ready, opening a new account can take as little as a few minutes online — but the other steps will take more time. Your old bank might require you to make a phone call, fill out paperwork or visit a branch to close an account. You’ll also have to reroute any direct deposits or automatic bill payments. Taking the right steps to switch banks can minimize obstacles.

It may sound tedious, but if you’ll save money, it could be worth it.

Melissa Lambarena is a staff writer at NerdWallet,a personal finance website.
Email: mlambarena@nerdwallet.com.
Twitter: @LissaLambarena.

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