Thinking of switching banks? Here’s what you need to know.


Fake banks? Sadly, they do exist so be careful.

Think your bank is jerking you around with fees and less than good customer service? You wouldn’t be alone.

The U.S.’ banks have certainly given consumers enough reason, with things like federal agencies having to rescue customers from outlandish fees and banks throwing in the towel and closing for good without as much as a peep to their customers.

Things are so bad that a new Motley Fool survey shows that 76% of respondents said they are likely to switch banks if they find one that better meets their priorities, up from 52% in 2020. Especially the younger generations.

The researchers found that more millennials already have one foot out the door, ready to switch banks, as opposed to baby boomers, although 67% say they would switch banks if they found one that was better suited to their needs.

The Federal Deposit Insurance Corporation (FDIC) says – in so many words – that it understands the situation, but it advises anyone who’s thinking about switching to another bank to weigh several factors before jumping ship.

Breakup to makeup

Before you announce your intentions to get this divorce, the FDIC urges consumers to figure out what they want: Make a list of what's important to you in a bank, like fees, interest rates, or the top three things that the Motley Fool study found: Security and fraud protection, good customer service, and features like mobile and online access.

Then, compare different institutions to find the best fit. One word of warning though – don't be swayed by short-term promotions because those might turn out to be nothing more than short-term promises.

And, most importantly, talk to your current bank. If you're unhappy about fees, tell them and see if they can offer a better deal to keep your business.

If you’ve been rubbed the wrong way by a certain employee or department, let them know that, too. Maybe they can put you with a team that can better handle your needs.

Prepare for some stuff to get lost in transition

Changing banks nearly always comes with some gaps in service between the old bank and the new one and it could take several weeks before everything is smooth again. “So plan ahead,” the FDIC suggests.

“If you automatically transfer money from checking to savings at your old bank, start making those transfers at your new bank as well. This also might be a good time to increase your savings commitment.”

Another suggestion is to consider starting small – especially if fees are a turn-off. If you open your new checking account with a small minimum balance, you’ll probably avoid fees if you won't be using it right away. But, you might want to consider keeping some money in your old account for a while to cover any remaining bills.

Beware of darkness

The sad and true state of things is that if you are looking for a new institution, there may be scammers and fake banks pretending to be from reputable institutions (such as an FDIC-insured bank) to gain your personal information. 

To play it smart, you can verify whether a website is a legitimate FDIC-insured bank's website by checking on the FDIC’s BankFind

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