Switch and Save
I can’t believe the number of people who pay outrageous fees, or settle for next-to-no interest, on their bank accounts. Whazzup with that? Many of us keep our money in a Big Six Bank, earning a pittance in interest and paying liberally for service. And then we make matters worse by not managing our money properly, so we’re in overdraft, bouncing cheques, or using banking machines that not our own and paying BIGTIME for it.
One of the main reasons people won’t switch accounts is laziness. Yup, plain and simple. It takes work. And not a small amount of work either. If you have pre-authorized debits, it can feel like torture trying to get them all switched over. But if all that’s standing between you and an account that pays decent interest without exorbitant fees is laziness, you need to give your head a shake.
Start by making a list of the things you actually need on your account. Do you write cheques anymore? How often do you go to the banking machine? (If you’re going more than once a week, you’re using the ATM as a wallet. Stop.) How many swipes of your debit card do you do in a month? Do you travel a lot requiring easy, cheap access to your money when you’re on the road?
Once you know the services you need, it’s time to go shopping to compare prices and features. You can hit the pavement, let your fingers do the walking, or head on over to the Financial Consumer Agency of Canada’s website and use the interactive tool to narrow down the alternatives
Here are five easy steps to make the switch once you’ve found your new account home
Step 1. Open the new account and get all the information you’ll need like the account number, your branch number, and the like. If you’re using cheques, order some.
Step 2. List your auto-transactions. What’s being automatically deposited or withdrawn from your old account? Look over your past few statements and make your list
Step 3. Reconcile your account. You have to account for every penny so you don’t have any nasty surprises during the transition. Those six post-dated cheques to the music teacher will bounce sky high if you close the account without telling her and replacing her cheques.
Step 4. First switch over all deposits and then switch over the withdrawals. That way there will be money in the new account when withdrawals start.
Step 5. Leave the old account open for about two months with some money in it to catch any missing deposits or withdrawals. Don’t worry about the balance in the old account is just sitting there wasting time. It’s protecting you from the aggravation caused by a poor memory. Be patient and when there’s been no activity for a month, consider yourself in the clear and close the old account.
June 2nd, 2008 at 8:56 am
Gail you are so right about people paying rediculous fees, and it really is just laziness or not paying attention.
Often what happens is people open the accounts and don’t take the time to re-visit if the account package is still the right fit for them. When peple have had accounts for 5, 10, 15+ years, life changes and their needs change. If you are paying high fees, call your bank and discuss your account package. Is there another package that would be a better fit? Often you can change to something else without having to change your account numbers or pre-authorized debits/credits.
You can also take Gail’s suggestions. Look at a few months worth of bank statements and add up your various transactions and transaction types. Then visit your bank’s website to see for yourself what other accounts they offer.
Do you do a lot of debit purchases? Maybe you need unlimited transactions on your account for a fixed cost.
Only cash your cheque and use cash? Maybe there is a no monthly fee account with minimum withdrawls for free.
If you are frequently using another bank’s ATM because your bank’s ATMs are not convenient then you may want to switch banks or pre-plan your cash withdrawls. Get cashback at the grocery store or other merchants who offer that service.
There are a lot of ways to save money on your banking. The first steps are to take the time to educate yourself on your options. Then call your bank! There are a lot of us “bankers” who would be happy to talk about your accounts and products and see what we can do to set up with the best package for you and help you save some money too. : )
June 2nd, 2008 at 7:10 pm
In the last 10 years I’ve switched banks 3 times (The old Canada Trust –> TD (which later becomes TD Canada Trust) –> HSBC –> PC Financial). Gail, I’m speaking from my experience: I don’t think switching banks is that difficult at all. And I agree with you: people don’t switch because they are lazy.
June 2nd, 2008 at 8:43 pm
I BEAT YOU!!!! I just switched my account to a “no-fees” one last week! ( I just gave myself a nice little pat on the back - and a virtual hug to you) Your lessons must be sinking in if I can anticipate them!
The good news is after shopping around to different banks, no one could match my current Credit Union, so I just shifted accounts within the same branch. It took 10 minutes and everything swapped over effortlessly.(I can even use the old checks). I just to keep a balance over a certain amount for the most benefits. Everything over my monthly budget is easily transferred into another no-fee account that has a really super interest rate (and I can only withdraw once a month, so I really need to be aware of what I need it for!).
I can’t believe the services that are available out there for people that take the time to look.