Bank Transfer Day: 5 tips for a smooth transition

Consumer Reports News: November 04, 2011 05:08 PM

Big banks may have recently scaled back plans for debit card fees, but activists are still encouraging consumers to switch their money to a credit union or smaller bank, and have dubbed this Saturday, Nov. 5, Bank Transfer Day.

According to a new poll by market research firm Harris Interactive, big banks may be vulnerable to losing customers to credit unions. Harris surveyed 2,463 adults online, and found that while 87 percent of individuals banking with credit unions reported being extremely or very likely to continue doing so, customers at the nation’s largest banks were not feeling so loyal. Only two in five of Bank of America customers were extremely or very likely to continue with that bank, as were less than half (46 percent) at JP Morgan Chase and just over half (54 percent) at Wells Fargo.

Consumers Union, the advocacy arm of Consumer Reports, has tips to help guide consumers switching to a new financial institution:

  1. Open your new bank account with a small deposit, leaving the bulk of your funds with your old bank. Deposit just enough to avoid any fees you may be charged for maintaining a low balance.
  2. Next, make a list of all the automatic payments and deposits scheduled to go in and out of your old account each month. If you have direct deposit, ask your employer to reroute your paychecks to your new account. Find out what date the first deposit will occur, then reschedule each automatic payment or debit to come out of your new account and make sure to ask the company what date the change will apply.
  3. Leave some cash in your old account for at least one month.
  4. Once you are sure that all automatic payments and all direct deposits are coming and going from your new account, electronically transfer the final funds from your old account.
  5. Once the transfer clears, follow the procedure laid out by your old bank to close your account. If you don’t close it, you might get hit with a monthly account maintenance fee even after you stop using it. Get written confirmation that the account is closed.

Watch for new bank fees: You can fight back against being nickeled-and-dimed [Consumer Reports]

Maggie Shader

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