How I Finally Ditched My Big Bank Account

Karachi, Pakistan - November 29, 2011: A young man cutting Visa credit card to quit the credit cycle in Karachi, Pakistan.

I’ve been a Wells Fargo customer since January 2013. I opened my first credit card with the bank, my first and second set of business deposit accounts, and had my personal deposit accounts with them. In total, I had five accounts with Wells Fargo.

I started having second thoughts about my loyalty to the bank in September, when revelations of Wells Fargo’s fraudulent sales tactics came to light. From 2011 to 2015, in an effort to boost their sales figures, Wells Fargo representatives opened more than 1.5 million deposit accounts and 565,000 credit card accounts without customer authorization, according to the Consumer Financial Protection Bureau. As a result, customers were charged a total of $2 million in fees. Wells Fargo agreed to pay a whopping $185 million fine to settle those claims, which were filed by the CFPB.

The scandal left me reconsidering my decision to bank with Wells Fargo at all. This month, I made the decision to close all of my remaining accounts with Wells Fargo and open up a new account elsewhere. I don’t know yet how many more Wells Fargo customers will join me, although the company’s third quarter earnings report indicated its retail business hasn’t survived the scandal unscathed. The bank saw a 25% year-over-year decline in new checking account opens, and credit card applications were down 20%.

Still, the bank’s customers are known for being loyal. Last year, Wells Fargo ranked the highest in customer satisfaction, beating Bank of America, Chase, and Citibank.

For me, the damage was done. It was time to switch banks.

Making the Big Switch

Moving to a new bank is hardly a painless process. That could be why so few Americans make the effort, despite a rise in onerous bank fees at large retail banks. Only 17% of account holders switched their primary financial institution in 2014, according to one study.

Here’s how to do it:

  1. Breaking up with my big bank

I quickly realized it was not going to be a clean breakup. A search on Wells Fargo’s website showed me that my account had to be empty before I could close it. That would mean either making one big cash withdrawal, or opening a new account at a different bank first and transferring the funds over.

I decided to go with option 2. I would open a new bank account and transfer my Wells Fargo balance over.

  1. Choosing a new bank

I used the MagnifyMoney checking account tool to guide me in the right direction. In the end, I chose to open an account with Ally Financial, an online-only bank. I had been considering opening an account with an online bank for a while. Online banks typically don’t charge as many fees as big banks because they have much lower overhead costs.

I opened a savings account, too. I was only earning 0.01% at Wells Fargo. Ally offers a 1% yield on its personal savings accounts, which will be a big incentive for me to save more.

  1. Transferring funds to my new bank  

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It took me five minutes to open a checking and savings account at Ally.com. At the same time, I linked my Wells Fargo account to my Ally account, which would allow me to transfer my funds over.

  1. Closing my Wells Fargo account

Once my account was empty, I sent an email to Wells Fargo through the bank’s online portal requesting the account be closed. Within 24 hours, a representative sent me a message saying my account would be closed in four business days.

  1. Keeping my zombie account at bay

Here’s the big risk when you close a bank account: It leaves a trace of itself behind. And any type of transaction — deposit or withdrawal — can reawaken the account. (They call them “zombie accounts” for a reason.) You may not even realize your old account was opened again, and you could rack up unnecessary fees for months or years until you notice it.

It only took me a few days to mess this one up. I closed my Wells Fargo account very close to my normal payday. I didn’t update my direct deposit account quickly enough, which meant my paycheck went into my old Wells Fargo account rather than my new Ally account. Suddenly, my “closed” account was reopened again. And I had to repeat the process — withdrawing funds and closing the account all over.

  1. Erasing my banking past

I decided to shred the debit cards that were previously linked to my Wells Fargo account. I also shredded my checkbook. It’s important to take these steps to avoid identity theft. Like I said, even the smallest transaction could reawaken my old bank account.

  1. Updating all my payment accounts

I make most of my recurring subscription payments through a PayPal account, so that made life simpler. I only had to change my bank account linked to PayPal. Next, I updated Venmo, which I use frequently to pay my roommates my share of rent and utilities. I changed my Amazon account information, went ahead and updated the rideshare apps I frequently use like Uber and Lyft, and updated my automatic bill payments with T-Mobile.

You should do this with any other apps you use that are linked to your old debit card or bank accounts. When you do change the information, make sure to delete your old bank account information so there’s no chance of accidentally charging the account.

If you use any online resources or applications to manage your finances, you should update them to keep information current. This is optional, but important if you want to keep track of where your money is going. For me, that meant updating my Mint.com account.

With all of that done, the bank switch was complete. It only took about an hour execute the steps above, and my Wells Fargo accounts were all closed within four business days once I got the closing process restarted.

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4 Bank Perks You Probably Don’t Know About

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Whether you’ve got the big bucks or are working on it, it’s nice to know that some banks out there roll out the red carpet for loyal customers. Not only do they promise to manage your funds smartly, they offer a variety of services to make the experience that much better. Here, we’ve outlined some of the lesser-known perks that are currently lurking in Bank Land.

1. Bank of America Preferred Rewards

For those with a minimum $20,000 balance in their Bank of America and/or Merrill Edge or Merrill Lynch investment accounts, the company offers a three-tiered program aptly titled Preferred Rewards. Twenty-thousand smackeroos will grant you gold status, which means a helpful 5% interest hike on money market accounts, plus a 25% rewards bonus on credit cards. With platinum status, which requires a minimum balance of $50,000, the perks include up to 12 no-fee transactions from any non-BOA ATM for a year, a 10% money market account boost and a 50% credit card rewards bonus. (Like the sound of credit cards that reward you for using them? See our roundup of the best ones in America here.)

2. Chase Private Client 

Open to customers who maintain an average daily balance of $250,000 or more “in any combination of qualifying linked deposits and investments,” its site says, Chase Private Client is basically a dream concierge for your finances. Members get the VIP treatment with a Private Client Banker, plus access to travel benefits such as rushed replacement of debit or credit cards almost anywhere worldwide, a 24/7 U.S.-based service line, a discount of $750 on closing costs on all home loans, and so on. For arts buffs, the access to local culture and events — think free admission to world-class museums like the MoMA — is also worth writing about.

3. Schwab Bank High-Yield Investor Checking Account 

If ATM fees are slowly draining your checking account, perhaps a change of banks is in order. Schwab Bank offers no ATM fees worldwide with this checking account, plus there are no monthly service fees. Members also can earn interest on their balance. (Not sure where your finances stand? You can view two of your free credit scores, updated every 14 days, with a free snapshot of your credit report on Credit.com.)

4. TD Personal Checking 

Considering applying for a home equity line of credit? If so, TD Bank has an offer to sweeten the deal: “Checking customers receive an extra 0.25% discount off our already low variable rates,” its site says. Be sure to check with your local branch for more details.

Remember, it’s important to read the fine print of any financial product you’re considering to be sure it’s right for you. And, if you’re interested in bank perks, you can also check to see what your current financial institution offers. There may be some options you have, but don’t know about.

At publishing time, Bank of America and Chase products are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

 

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms forcredit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: gradyreese

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Do I Need a Safety Deposit Box?

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Quick, where’s your birth certificate? How about your will? That piece of heirloom jewelry your grandmother left you? If you didn’t say in a safety deposit box, you could be at greater risk of losing these valuables in a fire, flood or other natural disaster, even if you have them in a safe at home.

You’re also at greater risk for identity theft in the event your home is burglarized if important documents that include personal information like your Social Security number, credit card numbers and other personal facts are easily accessible.

While a safety deposit box isn’t absolutely foolproof in guarding your valuables, it can offer a layer of protection and assurance that the average person’s home simply can’t. Here are the pros and cons of using a safety deposit box.

The Pros

1. They’re Cost-Effective

Safety deposit boxes come in various sizes and range in price from roughly $15 to $500 per year. That can be a small price to pay for top-notch, ’round-the-clock security and surveillance, particularly if your belongings are highly valuable.

2. More Protection From Natural Disasters

If your home is hit by a flood, fire, earthquake or other natural disaster, personal items like jewelry and documents can be destroyed. Safety deposit boxes are typically installed within vaults that are not as prone when it comes to natural disasters, meaning your valuables have an extra layer of protection.

3. Keeping Track of Valuables is Easier

Knowing that all your valuables are in one secured place can provide peace of mind, particularly for aging people who might forget where some items are filed in their homes. It’s also easier for family members to access important documents in case of emergency or even death. Of course, you still have to keep track of the key(s).

4. Better Theft Protection

Home safes may seem like a cost savings, particularly if you have a lot of items you need to store, but in some cases they’re easier for thieves to open and even remove from your home.

The Cons

1. Limited Access

Access to your safety deposit box is limited to bank hours, which can be inconvenient for some people and circumstances. And in the event the owner of the box dies and there is no one else with access, the box could be restricted for weeks, so any important documents — like wills — would be inaccessible.

2. Limited Space

You’re only going to get so much room in a safety deposit box, so if you have a lot of items you want to secure, you might need two or more — and forget large items altogether. The largest safety deposit boxes are usually only about 15″x15.”

3. Items Can Still Be Damaged or Stolen

Safety deposit boxes are typically safer than keeping documents at home, but that doesn’t mean they can’t still be damaged. Banks advise placing your items in waterproof containers within your safety deposit box and also taking photographs of the contents so that your chances of recovering your items after a disaster are improved.

Safety deposit boxes are also safer when it comes to theft, but that doesn’t mean it won’t ever happen. It’s wise to still insure any valuables you might have in the box with a homeowners or renters insurance policy rider, and keep copies of all important documents in a different location.

As you weigh the pros and cons of getting a safety deposit box, it’s good to remember that your credit score is one of the most valuable assets you have. That’s why it’s a good idea to keep track of your credit scores by checking your two free credit scores, updated monthly, on Credit.com, and also pulling your free credit reports each year at AnnualCreditReport.com.

More Money-Saving Reads:

Image: Susan Chiang

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Top 5 Checking Accounts for College Graduates

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When you open your first bank account as a kid, you’re not thinking about fees. You’re just excited to swap your piggy bank for a debit card. That first bank account may even stick with you up until college. That doesn’t mean it’s the account you should keep for the long haul.

Some checking accounts give you a break on fees while you’re a student, but after you get a diploma or turn a certain age these bank accounts get expensive. For example, Bank of America waives the $12 monthly fee on its checking account for students under 23 years old. After graduation, that’s an extra $12 per month you’ll want to keep your hands on.

If you have a checking account that will phase you out of a discount, it’s time to shop around for accounts with the lowest possible fees. Here are six checking account alternatives college graduates should consider:

1.Charles Schwab Online Checking

No Monthly Fee, ATM Fee Reimbursement Worldwide

charles-schwabCharles Schwab has no fees or account minimums. This account comes with free checks and bill pay. You can connect your Charles Schwab online checking account to Apply Pay for purchases if you have an iPhone 6 or iPhone 6 Plus. Deposits can be handled remotely through Schwab check deposit.

Where this checking account stands out from other accounts below is it has an unlimited fee rebate for cash withdrawals at ATMs worldwide. Charles Schwab will reimburse you every time you use an ATM that charges a fee. This makes it ideal for those planning to travel frequently.

Apply Now

 

2. Ally Bank Interest Checking

No Monthly Fee, ATM Fee Reimbursement Up to $10 Per Month

allyAlly Bank offers an online checking account without monthly maintenance fees. There’s also no minimum balance required. You’ll get charged certain fees in unique situations. For instance, an overdraft will cost you $25. To avoid an overdraft, you can set up free automatic transfers from another account. This means free overdraft protection, which isn’t the case at many banks that will charge you $10 to move your money from savings to checking.

If you’re used to walking into a bank to manage your money, you won’t get the same experience with this online account or any of the other online checking accounts on this list. But, managing your money is still easy. Ally Bank allows you to deposit money remotely using Ally eCheck. You can also transfer money between Ally bank accounts or sign up for direct deposit to put money into your account.

For withdrawals, you can use Allpoint ATMs in the U.S. for free. If you use an ATM that’s not Allpoint, Ally Bank will reimburse you ATM fees up to $10 per billing cycle.

Apply Now

 

3. Bank of Internet USA Essential Checking

No Monthly Fee, Unlimited ATM Fee Reimbursement in the U.S.

bank-of-internet-usaThe Essential Checking account offered by Bank of Internet USA has no monthly fees as well. There are no fees for overdraft or insufficient funds. If you try to make purchases without enough funds in your account, your card will simply be declined.

Withdrawing money from this checking account is convenient and cheap. You can use any ATM in the U.S. and Bank of Internet USA will reimburse the ATM fees. No need to hunt for a specific ATM to get free cash.

Apply Now

 

4. BankMobile Totally Free Checking

No Monthly Fee, ATM Fee Reimbursement With Conditions

bankmobile picBankMobile has a checking account with no fees or a minimum balance requirement. When it says no fees, it seriously means no fees. You can use the BankMobile app to deposit checks via remote deposit and you can set up direct deposit. For withdrawals, BankMobile has a map where you can locate STAR surcharge free ATMs.

If you have at least $500 deposited into your account each statement period, you can join the BankMobile VIP program. With VIP membership, every ATM in the U.S. becomes free.

Apply Now

5. Capital One 360 Checking

No Monthly Fee, ability to deposit cash, Doesn’t reimburse ATM fees

capital-one-360The 360 Checking account from Capital One has no fees. There’s no minimum balance required either. You have two options for overdraft protection. Connect your checking account to a savings account and have funds transferred automatically when your cash runs low. Or you can apply for an overdraft line of credit. Of course, with a line of credit interest will apply to your balance.

Deposits can be easily made through the mobile app, direct deposit or by sending a check. You get access to free cash withdrawals from 38,000 Allpoint ATMs and Capital One ATMs. If you use an ATM out of the network you may get charged by the bank you withdraw money from and these charges are not reimbursed.

A unique feature of the Capital One 360 Checking account is the ability to deposit cash at many ATMs. Not many Internet-only banks offer the ability to deposit cash. Before signing up for this account purely for this reason, you should guarantee an ATM near you allows you to deposit cash.

Apply Now

Which is the right checking account for you?

All of these accounts are insured by the FDIC up to $250,000. But, if banking online only still makes you a little nervous, the 360 Checking account is a good pick. With this account you can visit a Capital One branch for some account services like disputing transactions and changing your account information. Otherwise, Charles Schwab and Bank of Internet USA have the potential to save you the most money if you routinely frequent ATMs.

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