November 08, 2011

A Cautionary Tale of Switching Banks

DS and I recently decided that we wanted to go back to using a Credit Union.  We used one in Madison, and were very sad to say goodbye when we moved to CA.  There weren't a lot of options in Santa Barbara, it's a small place, so we went with Wells Fargo because it was easy to access.  We didn't love it.  They charged us fees for everything that the UWCU used to do for free, and this was before the crash that made banks decide to create a bunch of new fees.

When we moved to PA, we talked early on about finding a new CU now that we're someplace bigger (and, we're assuming, with more selection).  But we are apparently lazy at heart, because Wells Fargo was everywhere (they existed here alongside Wachovia before the merger, and so after the merger, well.. ) and it was easier to stay.  Then we get a notice that their policies are changing, and we should login to our account online to read them.  It's a good thing I did, because they were major changes.  The most notable being that basic checking accounts were going to cost $15/mo.  Yes, you read that right.  Per month.  That's $180 a year just to have a computer manage my money.  Money that the bank uses to make more money while it sits there.

We decided this was reason enough to finally make the move.  A word of warning if you decide to do this.  Switching banks takes time.  I wish we had started sooner, because we ended up with a deadline based on when we would get charged for having the checking account.  It made things more stressful than they needed to be.  I'm not sure what's standard, but the new credit union holds check deposits on new accounts for 7 business days, and accounts are apparently "new" for a full month.  There is also a further hold on checks over $5000, and specials holds for personal checks.  This meant that the way we did it, closing the old checking account, getting a cashier's check, and depositing it into our new CU, with weekends and holidays included, kept us from having any access to our money for 14 days.  Kind of ridiculous.  I sort of wish we'd just paid the Wells Fargo fee to electronically transfer the money to the new account.  But at the time, I was very turned off by the $20 fee.

Of course, had we started earlier, we could have gotten DS's direct deposit set up in time to go through the CU for November, which would have prevented all of these issues.  It didn't help that we did most of this on the first of the month, which gave us maybe 2 days to play with before we needed all that money to pay the monthly bills.  Thank goodness for parents and excellent CU customer service...

On top of all that, when I went into the bank to close my account, the person that helped me (who was, admittedly, very nice) did not ask which account I meant, and took it upon herself to only close the checking account.  So the savings account sat untouched, with a zero balance, which is a $5 monthly fee when under $200...  I didn't even know it was still open until told me I had a low balance of $.14.  I guess I got an interest payment?  I contacted the bank again and told them of the mistake and that the savings should have been closed.  I was informed I'd have to do it in person, because the balance on the account was not zero, or I could mail them a notarized letter and they could send me a certified check.  For 14 cents.  Which I shouldn't even have had if they'd closed the account when I asked.

So what I'm telling you is this.  If you decide to switch banks, find out what sort of waiting periods your new place has, and plan accordingly.  If necessary, get your old bank to give you enough cash to get by, instead of a lump sum cashier's check.  And remember that direct deposit changes and potentially take 3 weeks to go into effect.

No comments: