Working with Team Clark, I’ve learned a lot about online banks and credit unions and how they typically have fewer fees and higher interest rates on savings and checking accounts than traditional banks. Switching banks seemed like a bit of a hassle, but the more I learned about the advantages, the more I knew I would have to bite the bullet.
Choosing a new bank
I began my research with online banks and found an overwhelming number of options for online banking. I decided to poll people around me who bank smarter and already use an online bank, and it came down to Discover and Capital One 360. My first impulse was to go with Capital One because they have more options for withdrawing money — important for people who like to keep extra cash on them.
While I was still trying to decide between the two online banks, I also started to look into credit unions. Michael from Team Clark shared his experience saving money by banking with multiple banks, so I knew I might want to have several options. Credit unions are member-only but I realized that my mother was already member of one, so I figured I could potentially bank with hers. I looked up her credit union and they had great reviews related to helping people build credit and manage debt, so that definitely caught my attention.
In the midst of all of my research, the Equifax data breach came to light. I realized I needed to pay more attention to my credit and to monitoring it, so on Clark’s suggestion I decided to sign up for Credit Karma. As soon as I signed up Credit Karma, it suggested I get a Capital One credit card to help build my credit. The card was also listed as the top credit card on the site. This helped make my decision between banking Capital One 360 and Discover much easier.
I continued my research on Credit Unions and decided to call the one my mom banks with. I learned that because I lived in a certain county, I already qualified as a member! My next step was to go into a branch to open an account. I could’ve opened an account online, but I was told that process could take up to a week, while going in person would make it happen immediately. There are some advantages to the physical branches most credit unions offer!
Things to do before switching
I was so excited to be taking steps to bank smarter and switch banks that I almost forgot to call to change my direct deposit before I closed my account at the bank I was switching from. That could have caused some huge headaches!
Before you switch banks, you should:
- Remove the money from the account you’re closing into your new account(s) before completely closing it out
- Arrange with your employer to change your direct deposits to your new accounts
- Call any companies that are automatically drafting money from your account and provide them with your new account information
- If you are staying keeping your old account open, but moving some of your money, make sure you check with your bank about minimum balances, so you will not be charged extra fees
Things to look for in your new bank
- No minimum balance required
- No monthly fees
- Online and mobile access
- No ATM fees
Read More: Choose and switch to a better bank for you
Making the switch
I called Capital One 360 to get more information on opening an account there. Although it’s an online bank, I like speaking directly to someone — it just makes me feel more comfortable. I found there customer service to be wonderful.
I decided to open two savings accounts with Capital One 360, one to help plan for short-term goals and one for longer-term planning, since they offered a higher interest rate on savings than my credit union.
I opened a checking account with my credit union and also decided to get my credit card through them instead of the online bank. Capital One’s credit card is a great option to build your credit, but when I compared apples to apples, my credit union had a lower interest rate on its card offering. As someone who doesn’t always pay off my balance, that was a no-brainer for me.
All of the accounts at both banks came with no fees and no minimum balance requirements attached. The mega-bank that I switched from which was charging me for not having enough money in my checking anytime I dropped below a certain balance and charging me to maintain a savings account! My new banks also have easy mobile and online access, which is great for me because I am always on the go. I can monitor my new accounts from wherever I am!
Yes, switching banks did involve an investment of time and effort on my part, but I’m so happy I did it. Not only will more of my hard-earned money stay in my pocket, I’m now extra-motivated to make better, smarter decisions in all aspects of my financial life. If I can do it, you can too!!!