Make Money By Switching Banks

  • Don’t reward mediocrity

    Does your bank suck? Do they not have enough ATM machines in your area? Is their customer service sub-par? Do they work ridiculously short “banker’s hours” at the branch you typically visit for deposits and questions? Photo Credit: Getty Images
    Many reasons to switch
  • Many reasons to switch

    There may be a thousand reasons to leave your old bank, plus one very good reason to take your business elsewhere: the bonus offer. I recently made the switch from Bank of America (Stock Quote: BAC) to Chase (Stock Quote: JPM). I will still use my old Bank of America account for some things such as Bill Pay, since they have one of the best bill pay services I have seen, but for most everyday purchases and deposits I now plan to use Chase. Photo Credit: Getty Images
    Go with an ATM giant
  • Go with an ATM giant

    Chase simply owns the New York ATM market; virtually every block has a Chase ATM of some kind, whether it be a standalone branch or a branded ATM at the drug store. Of course, if you’re in “Bank of America country” it would be wise to switch to Bank of America from your old bank… as long as you get a bonus. But regardless of where you are and what bank you switch to, here’s how to make the transition painless—and how to profit from it. In my case, I got $125 and 2,500 air miles for switching banks. Photo Credit: stan
    Also avoid incompetence
  • Also avoid incompetence

    Before making any switch, it is crucial to make sure the new bank isn't even worse than your current one. So do a test. Walk into a local branch. Is the bank filthy and disorganized, filled with depressed looking employees? Or is it a well-oiled, humming engine of commerce? Are you greeted with a smile? How long does it take for you to speak with a personal banker? How long is the line for making a deposit -- and how quickly does it move? 5 minutes in a bank branch can give you an idea of the company's culture, or lack thereof. This step is well worth it, especially if you will be using this local branch often to make deposits and withdrawals. Photo Credit: Getty Images
    Find an offer
  • Find an offer

    The first step, of course, is to get an offer. A lot of people are getting $100 offers from Chase in the mail (regular mail, not e-mail, that is) and Bank of America—if you are in an area where having a BofA account makes sense—has a similar offer on the table for new customers. The best way to get that offer is to visit a new Bank of America branch in your area. If you happen to use a Chase ATM machine but are not a customer, you may be presented with a coupon for a $125 at the bottom of your receipt (as opposed to their standard $100). Both offers are pretty solid, though. Also, the Chase offer may come with 2,500 bonus reward points if you opt into their “preferred check card” program. It’s basically a debit card that earns you points as a credit card would. The downside? There’s a $25 annual fee. If you’re looking for an online-only bank with free ATM access or ATM fee reimbursements, there are offers out there for you as well… Photo Credit: Getty Images
    The online-only option
  • The online-only option

    ING Direct’s Electric Orange checking account offers free ATM access through the Allpoint Network, which consists of more than 32,000 ATM machines across the country. If you use this link you will receive a $50 bonus after opening your account—provided you follow their eligibility requirements, which include using your new card at least three times for purchases processed as a credit card within the first 45 days. E*Trade Bank, while it does not provide a bonus for opening, offers unlimited ATM fee refunds “at any machine, any bank, anywhere nationwide.” That’s more than 325,000 ATM machines at your service. This is a truly great offer in my opinion—if you typically hit an ATM machine only five times per month, you would save up to $300 per year… for frequent ATM users, you would of course save even more. Helpful tip: make sure at least $5,000 is in your E*Trade Bank checking account at all times, so you can take advantage of their “Max-Rate Checking” program—it offers an interest rate of .3% -- that is four times the national average. Photo Credit: Getty Images
    Following fine print
  • Following fine print

    Hopefully I don’t have to remind you that large financial institutions like Chase, Bank of America, and ING are not in the charity business. If you don’t follow their eligibility requirements, they don’t give you a bonus at all. They get a new customer, a new deposit, and don’t have to pay a penny for the privilege. Follow the guidelines closely—keep in mind, many offers will require you to make 3 to 5 debit card transactions per month to avoid a service fee. For the average user, this is an easy requirement to fulfill. I use my check card at least once per day. Also, some offers may require you to setup a regularly scheduled direct deposit from your work paycheck, social security payment, or other source of regular income. There may also be a minimum initial deposit requirement—with Chase, it was $100. Don’t close the account after you open it, or you may not be able to keep the bonus. Avoid such a clawback! Photo Credit: Getty Images
    Don’t rush
  • Don’t rush

    How long will it take you to receive the new account’s check card in the mail? You should ask them. It typically takes 7 to 10 business days, but you shouldn’t close your previous account until you get the check card and activate it—you don’t want to be without access to any cash. If you open the account in person, some banks will give you a free book of temporary checks until the check card arrives. Photo Credit: Getty Images
    Avoid stuff you don’t need
  • Avoid stuff you don’t need

    Especially if you are opening the account in person, the smooth bank rep will push you to sign up for “added” features. They have gone through this dance thousands of times, have heard every possible objection before, and know how to get you to say, “sure, why not?” Do you want a “preferred” check card that carries an annual fee? Do you want a savings account as well? How are your retirement investments looking? For the bank, this is a great time to sell you on other services—and to get you to open up more than just a checking account. If you open a savings account, for example, the bank has increased its number of deposits even more… plus it is more likely to keep you as a customer. The more accounts you have at your new bank, the more inconvenient it is for you to leave when a better offer comes along. Photo Credit: Getty Images
    Some extras aren’t bad
  • Some extras aren’t bad

    It is very easy for us to assume anything a bank sells us is trash designed only for their gain. Subprime mortgage, anyone? Despite this recessionary cynicism, it is important to remember that some of the features you get offered actually do make sense. I was convinced to sign up for a preferred check card with an annual fee. Why? Because it comes with 2,500 bonus air miles, and earns air miles at an accelerated rate, which I think will help me this year as I plan to travel a bit more. If I don’t end up using the card as much as I expect to, I will cancel it. Similarly, a savings account at your new bank isn’t a terrible idea: a $200 or $500 buffer can be a nice way to avoid any insufficient fund fees in the future. Ask if they will link your savings account to your checking account as an overdraft line. Of course, don’t put too much in the savings account, because the interest rate is likely to be atrocious. Photo Credit: Getty Images
    Bill pay and scheduled withdrawals
  • Bill pay and scheduled withdrawals

    Don’t close out your old checking account until you have transferred any regularly scheduled withdrawals (such as monthly brokerage account transfers, utility bills, or credit card payments) to the new account. It’s also a good idea to turn on account alerts via text message or e-mail on your new checking account, so that you get notified of external transfers into and out of the account. This way, you will know if fraud occurs, and you will know precisely when your work direct deposits become available. Photo Credit: Getty Images
    If you’re happy, stay
  • If you’re happy, stay

    This advice is for those who are unsatisfied, for one reason or another. If you love your current banking relationship, it rarely makes sense to do all this work for a mere $100 bonus. Simplicity may be worth more than $100. On the other hand, a bank switch that is long overdue anyway… Why not get paid for giving them your business? And one final tip: if the bank offers Photo ID check cards at no added cost, get one while you’re there. It’s another easy way to protect your account from unauthorized charges. You won’t feel like doing it later on, so you might as well have the photo taken right then and there. Are you happy with your current bank? Let us know here in the comments, or on our useful Facebook page. Photo Credit: Getty Images
    Tweet alongside us
  • Tweet alongside us

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