Choose the Right Bank for You

Tired of high fees, low yields on savings, and poor customer service? There are more ways than ever to get what you need. by Scott Medintz Illustrations by Chris Gash

CONSUMER BANKING is changing, fast.

As you may have noticed, many walk-in banks are no longer providing the level of customer service they used to, as they close branches, cut sta , and ask customers to use technology to handle basic banking needs.

Meanwhile, online-only banks (which have no branches at all) and so-called neobanks (tech companies that o er bank-like services online even though they often are not chartered banks) have proliferated, ushering in some promising innovations and pushing the old guard to evolve. But some of these innovators have drawbacks of their own, such as limited resources for customer service should something go wrong, consumer advocates say. Hundreds of customers of one neobank, Chime, for example, recently complained to the Consumer Financial Protection Bureau that the company was slow to resolve their problems after they lost access to their funds.

The upshot? More reasons than ever to question whether you’re banking at the right place, and growing odds that if you’re dissatis ed with your current bank, there’s a nancial company that can better serve your needs.

What follows are ve common banking complaints, and tips on how to nd a bank that’s better for you. Keep in mind that it might make sense to bank at more than one place—by choosing one institution for your basic banking and billpaying, for example, and another for maxing out the interest on your savings. And make sure to think about your future needs: Some valuable banking services—small-dollar loans that can be quickly approved online, for example—are often available only to preexisting customers. And fees that might not a ect you now could prove costly if, say, your household budget tightens.

COMPLAINT You’re unhappy with customer service

Some of us may recall the days of “relationship banking” and familiar faces at the teller window. But that experience is fading into the past—for all except clients whose large deposits can buy them access to concierge-type services like dedicated tellers. The rest of us are expected, even by walk-in banks, to handle many of our banking chores ourselves.

But experts say ordinary customers can still nd solid service if they focus on the types of service they want and need—and are willing to use di erent institutions to satisfy them. phone, numerous banks, including several online-only institutions, have agents available by phone 24/7.

Highly personalized service is harder to come by, of course, but you may be more likely to get it at a small community bank, regional bank, or credit union, say banking experts we spoke with. Those institutions are more vested in their communities, so you may be able to develop personal relationships with sta members, and even get a direct phone number to call if you have a question or concern.

But none of this is a given even with smaller banks. If that’s the kind of service you want, ask friends, family, and neighbors about their experience with particular local institutions, and meet with a few local branch managers to ask about the accessibility of their sta .

Lauren Saunders, a consumer protection law expert at the National Consumer Law Center, says that smaller community banks and credit unions are less likely than national institutions to o er robust websites and apps, as well as a broad assortment of nancial products. Those, too, are a kind of customer service, so build those factors into your decision.

Conveniently located walk-in branches are obviously crucial, for example, if you’re looking for traditional in-person banking services, such as the ability to get certi ed checks or make large cash withdrawals. And if something goes wrong, it can be e cient to straighten out the problem face to face.

But an institution that maintains normal working hours may not be right for you if that doesn’t suit your schedule, says Matthew Goldberg, banking analyst for Bankrate. So seek out one of a number of banks that now o er evening and weekend hours at some locations, including behemoths TD Bank (until 7 p.m. on some weekdays, and several hours on weekends at some branches) and Capital One (Saturdays at some branches).

If you want to reach a human by

COMPLAINT You’re getting nextto-no interest on savings

According to a survey by Bankrate, the average interest rate on savings accounts was around 0.2 percent in mid-December—nearly zero. But Bankrate and NerdWallet list nearly a dozen banks paying 3 percent or better, and several pushing 4 percent. Some of the neobanks go even higher.

It makes sense that high-yield savings accounts are being o ered by banks that don’t have to cover the overhead of

walk-in branches. But these days a broad range of banks and credit unions are using higher rates to attract depositors, and that includes institutions that maintain physical branches. Capital One, for example, was paying 3.3 percent in mid-December.

The details matter when you choose a savings account based on yield. Watch for monthly fees or rates that apply only under conditions, such as maintaining a deposit of a certain size.

COMPLAINT Your ATM fees are really adding up

The average cost of an out-of-network ATM withdrawal is now $4.66, according to a 2022 study by Bankrate. Those fees can add up.

But there are several ways to avoid them. The easiest is to choose a bank with a lot of in-network ATMs near you, and avoid drawing cash anywhere else. But that may not be a solution if you travel a lot or live in a community without in-person banking facilities.

Another is to choose a bank that’s part of a large ATM network such as Allpoint, MoneyPass, Pulse, or STAR. Those networks are mainly used by online and community banks and credit unions that don’t have large ATM networks of their own, says Chanelle Bessette, banking spokesperson for NerdWallet. Many credit unions, for example, are part of the Co-Op network of more than 30,000 no-fee ATMs, located in credit unions and at many retail locations. To gure out which networks would be best for you, use the ATM locator tools they all have online to search by ZIP code.

Finally, a number of banks reimburse customers for out-of-network ATM fees. Some cap the monthly amount they’ll cover, while others will reimburse ATM fees only if you maintain a set minimum deposit amount. Because they generally don’t maintain their own ATMs, online banks tend to o er reimbursements, with caps.

COMPLAINT You’re paying overdraft fees

You can avoid certain overdraft fees by opting out of all overdraft programs, in which case your bank will simply decline a merchant or ATM transaction if your account is short the funds. But that can expose you to insu cient fund (or NSF) fees. Between the two, U.S. banks brought in almost $15.5 billion in 2019, according to estimates in a 2021 Consumer Financial Protection Bureau study.

Several forces, however, are working to rein in such fees. One is competition from online banks and neobanks, many of which promise to never charge these fees. Another is pressure from regulators, who have been targeting “surprise” and “junk” fees. As a result, several large national banks have lowered or even eliminated certain fees.

Again, the details matter. Some banks eliminated NSF fees but not overdraft fees. Others decreased overdraft fees or limited the number of overdraft fees they’ll charge per day. Still others added bu ers, such as grace periods or “cushion” overdraft amounts below which they won’t charge a fee. And a few, including Citi and Capital One, have eliminated these fees altogether.

In addition, a program called Bank On (joinbankon.org), part of the nonpro t Cities for Financial Empowerment Fund, has certi ed certain types of accounts at more than 300 banks and credit unions across the country that abide by its standards, which include zero overdraft and NSF fees.

HOW TO SHOP AROUND

ONCE YOU’VE DECIDED to look for a new or additional bank, you’ll have to do some work to find the institution that best fits your needs. Here’s how.

■ Pay a visit to a walk-in

bank you may be considering.

This is important if in-person banking is important to you. You want to confirm that the hours are convenient and the staffing is adequate, and that the branch offers the services you desire, such as having a notary on hand.

■ For the best savings rates, shop around online. To save time and find a lot of information in one place, websites like Bankrate and NerdWallet do an admirable job of compiling and keeping up with the ever-changing rates and terms associated with various bank accounts. But be warned that these for-profit sites (and others like them) are riddled with financial ads, and it can be hard to distinguish the ads from the data that the sites have compiled.

■ Find out about fees, whether

you do your research online or in-person at local bank

branches. A supposedly “free” checking account, with no monthly fee, isn’t a bargain if it hits you with huge fees when you overdraw by a few dollars, and a high-interest savings account won’t do you any good if getting that rate requires that you maintain a larger balance than you ordinarily have in reserve or spend a boatload each month on a credit card.

COMPLAINT You need a small loan and your bank isn’t helping

Banks have not historically o ered customers short-term, small-dollar loans, which is one reason so many Americans looking to ll small budget shortfalls turn to payday and other lenders that charge sky-high rates and often trap borrowers in cycles of debt.

Since about 2010, credit unions have been an exception, with many of them o ering payday alternative loans (or PALs) ranging from $200 to $1,000 and interest rates maxing out at 28 percent. (The typical rate on payday loans is about 400 percent.)

In the past few years, however, six big U.S. banks have begun o ering customers nearly instant small-dollar loans without running credit checks. Bank of America, Huntington Bank, Regions Bank, Truist, U.S. Bank, and Wells Fargo will give existing checking account holders loans of up to $500 or $1,000, depending on the bank, to be paid back in three to four monthly installments. To qualify, you may need to have been a customer for at least several months. Most charge modest at fees of between $5 and $25. “For a lot of Americans, this is going to be the least expensive way to borrow $500,” says Alex Horowitz, a consumer nance researcher at The Pew Charitable Trusts.

Even for consumers with access to lower-cost credit, like home-equity lines of credit or low-interest credit cards, the fact that these loans cost relatively little and can land in your account within minutes of lling out a short online application makes them appealing.

Breaking Up With Your Bank

If you decide that you want to switch, here are the steps to take.

■ Open the new account before closing the existing

one. For many banks, including some with physical branches, this can be a relatively fast online process. You may need to make an initial deposit to avoid monthly or other fees.

■ Send funds to your new

account. To do this you could use your old bank’s online or mobile-banking bill payment service, or the Zelle money transfer service. Or write a check from the old account to deposit into the new one.

■ Contact your employer or Social Security. Ask

them to move any direct deposits to the new institution. (Reach the Social Security Administration at 800-772-1213 or at ssa.gov/myaccount.) Direct deposit may also make you eligible for free checking.

■ Stop automatic

bill payments from the old

account. This can be easily done via the old bank’s website if you’ve been using its online bill payment feature for sending out so-called push payments. If you have authorized a company or utility provider to “pull” payments from your account, you’ll need to contact the company and follow its procedures for stopping payment. (We recommend that you avoid the pull method in the future so that you have more control over your account.)

■ Keep the old account open until all checks and payments have cleared.

That will keep you from getting hit with any fees.

■ Set up automatic

bill paying on the new

account. Also set up other account features you use, such as alerts or automatic money transfers.

■ Finally, close the old

account. Zero out any remaining balance by having the old bank electronically transfer the funds to your new account or by obtaining a cashier’s check or cash. There should be no fee to close accounts you have had for more than a few months.