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Complicated relationship with your bank? Here's when to switch

You may be paying fees you don't have to be paying
With wage growth now passing inflation, buying power plays catch-up
Posted at 2:40 PM, Mar 12, 2024

If you're in a relationship that's stale, expensive, and one-sided, you would leave, right? Well, the same holds true if you're in a bad relationship with your bank.

"People don't wake up and say I'm going to switch banks today," said Bankrate analyst Matthew Goldberg.

According to Bankrate, the average consumer has had a checking account with the same financial institution for 17 years. But times have changed, Goldberg said, and you might be missing out on new offerings such as competitive rates for online savings accounts.

Paying fees is another reason to bid your bank farewell.

"In 2021, at least a couple of banks got rid of overdraft fees," Goldberg said. "If you're frequently charged overdraft fees, looking for a bank that doesn't charge these could be a savings opportunity."

When evaluating your bank, debt relief attorney Leslie Tayne recommends you evaluate the services it offers and what's convenient for you.

"Many banks do use Zelle, but some don't," she said. "If you find that's one of your payment methods and you prefer that type of payment processing, then you might want to switch banks."

Unlike opening and closing credit cards, Tayne said there is no downside to moving money from bank to bank.

"Utilize each bank for whatever purpose makes sense for your financial needs," Tayne said. "Again, if you're looking at high-interest savings, that might be one option. For free checking, that may be another."

If you're worried about a scheduled payment, Bankrate suggests you leave your old account open until you've transferred everything to your new one.

While switching banks seems complicated, it's important to weigh all the potential perks including more interest, fewer fees, access to digital products, and even better customer service.