Five Signs It\'s Time to Change Banks

Author:     Wednesday, February 05, 2014 12:00 AM

According to studies from J.D. Powers and Associates, more and more Americans have been switching banks lately. In fact, it's estimated that nearly 10 percent of all customers switched banks in 2012, which is up from about 8.7 percent in 2011 and 7.7 percent in 2010.

Obviously, everyone has their own reason for switching banks - and the reasons vary more than you'd initially think. With that being said, there are several red flags that consumers should be on the lookout for that could determine whether they decide to stay with a bank or pursue a new financial home. Here's a look at some of the warning signs that can help you know when it's time to make a change:

FDIC Insurance: The Federal Deposit Insurance Corp., or FDIC, is an insurance that covers deposit accounts, money market accounts and certificates of deposit. Simply put, this insurance means that you'll still receive your money - or at least a significant portion of it - if something were to happen to the bank. However, if the bank isn't keeping its FDIC status, then you're out of your money if something were to happen.

Fees: It seems that it costs something to do everything these days. But a big part of the reason you joined your bank was likely due to the lack of maintenance fees on debit and credit cards and the fact that it didn't cost anything to open up certain accounts. But banks still pay regulatory charges on credit cards - and some banks might even try to recoup some of these costs by introducing fees. Nobody likes getting hit with an unexpected fee.

Life changes: Things change. So do people and lifestyles. Perhaps you're moving and the local credit union you've belonged to for years doesn't have a branch in your new city. Or maybe you travel a lot for work and are tired of paying ATM fees because it's too hard to find bank branch locations on the road. Many people choose to switch from smaller, local banks to larger, national banks when their lives change.

Customer service: Another popular reason for changing banks is due to poor customer service. For many, going to the bank is a "tolerated inconvenience." It can be even more than that if grumpy, impatient and unhelpful staff members are working there too.

Other: Some other reasons why people change banks is for more convenient bank hours, better access to banking through mobile apps and social media and automatic alerts when accounts are getting low.

Source: BFI