On Bank Transfer Day I learned something new: lots of people are curious about switching to a new bank or credit union, but they aren't sure where to start.
In case you're one of those people, here's the lowdown on how to move your money from a national bank to a locally-based financial institution. I moved three sets of accounts last month — two business accounts and our household accounts — from Big Ass Banks to a local credit union. Here's what I learned.
Research your choices: credit union versus local bank
Credit unions are customer-owned not-for-profits. They are often designed to serve a specific neighborhood or population, and clients are MEMBERS — not customers. Members have more say in what their CU does than do customers of a bank — which can mean they have greater ability to dispute credit card rate hikes or contribute input on the CU's board of directors.
Now, one of the main concerns I heard during the march on Bank Transfer Day was from people who feared their credit wouldn't pass muster, but when I opened our new accounts, Veridian Credit Union only ran a check on me for the purpose of overdraft protection. It was an easy-to-decline option. From my non-scientific on-the-internet surveys, I've found other people had the same experience and only required a credit check if they wanted a line of credit. One person reported their credit union ran a credit check just to open an account, but if you're worried you only need to ask ahead of time.
Locally-owned banks often offer a wider range of services than credit unions, and can be easier to open accounts with. The most noticeable difference is usually that credit unions are more likely to offer interest-bearing savings and checking accounts. That said, I was with a two-branch bank for years, and loved them dearly.
Pick a new joint
Bauer Financial offers simple star ratings of US banks and credit unions. Check out your current financial institution and compare it to other suitors in your area before you commit. You can order more detailed information for a fee, but the free ratings are enough to get you started, for sure. Between rating agencies and institutional web sites, you should get a good idea of bank or credit union policies before you make a visit.
Ask if there's a transfer kit
Many institutions offer help in moving your money over smoothly and quickly. Cut the hassle and let them help you out.
Gather important information
Write down any automatic payments you'll have to set up in your new institution. Bring at least one form of ID, two pieces of mail with a current address, and the amount needed for a minimum deposit (just $5 per account for me). If you're opening a business account, you will need the document assigning your business' Employer Identification Number, as well as the help of any partners you may have.
Give yourself ample time!
It's smart to open your new account, move most of your money over, and set up new automatic payments. When everything's securely stowed, you can close out the old account and say sayonara to the big bank.
So you'll need time to wait for new checks and debit cards to arrive, but you should also make time to open the accounts themselves. I visited a busy branch on a Saturday and spent most of three hours setting up my new accounts — BUT! That included waiting in line, and the fact that I opened three new checking and three new savings accounts. During that time, I was happy to learn all about how my new credit union worked from Cecilia, who is my new credit union best friend.
It's a little bit of work to move your money, but when you do, you'll be speaking out against bad practices which have endangered the world economy AND you'll support businesses which keep dollars closer to home. Not to mention you might be able to make your money work a little bit harder for you.