Five Reasons to Break Up With Your Bank
Money + Markets

Five Reasons to Break Up With Your Bank


The fees that banks charge consumers have continued to grow each year since the Great Recession. Yet Americans appear to be unfazed by the hikes, as overall satisfaction with retail banks has grown in annual surveys since the crisis. That complacency could be costing consumers, as free checking becomes scarcer and the cost of over-drawing an account or using an out-of-network ATM increases.

A recent survey by MoneyRates found that only one in four banks now offers free checking accounts, and the cost of maintaining a checking account averages $159 a year.

Still, the widespread adoption of direct deposit and automatic bill pay make checking accounts particularly “sticky,” or harder for banks clients to switch away from. Only 5 percent of consumers made a switch last year.

Slideshow: The Best Bank in Every Region of the US in 2016

That’s why banks are aggressively courting new customers with enticing promotions of up to $250 in bonus cash or a free smartphone. “Promotions like that have been hugely successful for credit card companies,” says Nick Clements, a consumer banking expert and co-founder of “We’ll see how they do in the retail banking space.”

The fears around the process of switching banks may be overblown. While 60 percent of those who have never switched banks believe that doing so would be difficult, more than 80 percent of those who have switched say it wasn’t difficult at all, according to a recent survey by Kasasa, a financial services company that offers fee-free bank accounts.

Here are five reasons to consider leaving your bank:

You’re paying high fees. If your bank charges you just to have a checking account or you are regularly racking up out-of-network ATM fees, you may be able to do better elsewhere. The fees at small banks are significantly lower than those of larger banks, and they often have lower minimum-balance requirements, too. Many online banks offer checking accounts without any fees at all, and even large banks may wave their fees if you set up direct deposit or maintain a minimum account balance.

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You’re obsessed with your phone, but your bank isn’t. If you’re the kind of person who does everything from ordering food to booking travel plans via your phone, you also want to be able to carry out your financial transactions the same way. About a third of millennials consider mobile banking as a top day-to-day financial service, more than double the percentage of all Americans who feel that way, according to a recent survey by TD Bank.

The best bank apps not only let you check your account balance and find a nearby ATM, but they also offer deposits, transfers and bill payment via your phone. All of those services should be available to you for free.

It’s inconvenient. You want a bank that offers branches and ATMs that are geographically close to you (or one that reimburses you for using out-of-network ATMs). Your bank should also provide customer service on your schedule, via either phone support or with extended branch hours. Banks have been closing branches in recent years, and the branch that had been nearest to you may not exist anymore. If getting your banking done has become more of a hassle, it’s time to look around.

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You can find better rates. Even if you’ve decided that it’s too much effort to move your checking account to a new bank, there’s no reason to keep your savings account at the same bank. “Maybe you don’t want to break up with your bank entirely, but it’s time to start seeing other people,” says Richard Barrington, senior financial analyst at

While interest rates on savings account remain near historic lows across the board, some banks offer bigger payments than others, with online accounts offering far higher rates. The average rate on $1,000 in an online savings account in the first quarter was 0.63 percent, not much to brag about, but still five times higher than the 0.12 percent average at retail banks, according to WalletHub.

You’re not happy with the service. If you’ve had more than one bad experience with a teller or a customer service rep, you may want to consider switching banks. “When a banking customer feels as though they aren’t being treated like a person, that’s a good reason to switch,” says Terry Jorde, chief of staff and an executive vice president at the Independent Community Bankers of America.

Given the steep competition for customers in today’s banking industry, there’s no reason to put up with being treated poorly.

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If you are considering a change, some online tools can help. Sites like and make it easy to search for new accounts based on reviews, fees and the features that you want, such as mobile banking or debit card rewards. Kasasa, mentioned above, lets you compare free checking accounts at community banks and credit unions.

Once you’ve found your new bank, you may want to pop into your current bank to let them know that you’re planning on leaving. They may offer to reduce your current fees or let you take part in a promotional offer in order to entice you to stay.

Even if your current bank can’t or won’t make you a better offer, you’ll want to keep that account open for a month or so while you transition to the new bank. Ask that bank whether they offer a switch kit, or any other help to new customers. Many will give you a checklist and direct deposit forms to make the process easier, and some will set you up with a personal concierge to hold your hand through the process. “Banks generally do a better job of helping people through the switching process than they get credit for,” says Jim Dellavilla, chief client officer with Catalyst, Inc., a marketing firm focused on the banking industry.

Contact your human resources department to switch over any direct deposits (a process that could take a few payroll cycles), and be sure to update any accounts that you pay automatically each month, such as your mortgage or student loans.

Once you’ve made all those changes, ask your former bank to send you a check and close the account for good. As long as you’ve had that account for a few months, there shouldn’t be any fee for closing it.

Slideshow: The Best Bank in Every Region of the US in 2016