CHOOSING A NEW BANK Can you find something better?

We are creatures of habit.  When it comes to things that are personal to us, like our health, our home, and our money, we are reluctant to change who we deal with --- our doctor, our plumber, our bank.  When I went searching for a new bank many years ago, I didn’t have any criteria, except that I knew my credit was not very good.  It felt awkward talking to bankers.  For me, talking about my credit score felt like talking to my parents about a bad report card.  Ever felt that way?

The fact is: your money is the reason a bank exists.  And it is your money.  Your financial situation is a function of circumstances and you are not alone in your situation.  Most Canadians have debt and struggle to crack the monthly “nut”.  The aging population is wrestling with retirement.  The majority of the population carries heavy credit.  So, if you are reading this and you have all the money and finances in the world, then you are among the few and good for you (and I mean that; I envy you).  The rest of us can bite off a bit more humility and read on.

Back to my point.  Your money is the reason a bank exists.

Your money is the reason a bank exists.

So, you are uncomfortably comfortable with your current bank.  You may or may not know how they make money off of you.  But here’s the thing: are you getting the most you can from them besides simply serving as a place to make a deposit and ferry payments for bills?  Tell you what.  Let’s go on a small adventure.  Imagine you are going to search for a new bank.  No worries. Keep your slippers on.  You don’t have to leave the room.  Your search starts in your chair.  Just grab your last bank statement --- and maybe a cup of java or whatever warms your inners and sedates your stress.

1.  Review your current statement and highlight the fees.
2.  Especially highlight anything you don’t understand or appears to you to be unclear.
3.  Multiply all those numbers by 12.  (Certainly, fees will vary, but this is the reader’s digest version of personal financial analysis.
4.  Note how many times your write cheques and how often you use ATMs.  Add up the fees you pay for those transactions.
5.  Review your online transactions (if you have any) and note any associated fees charged.  (I do many online transactions and the banks get a decent return from my activities.)

Here’s the point.  It won’t take long for you to realize that every bank makes money every time you process your money.  That’s not an evil thing.  It’s a fact of doing business.  Banks exist to provide the transaction services (among other things), so this is not about condemning banks and their operations.  At the end of the day, everything can be compared and you can find the best deal.  But now it’s time for a shift in your thinking.

You are not searching for a new bank.  You are searching for a new account.

And here’s what you are searching for.

1.  No monthly fees.
2.  No minimum balance requirement.
3.  No limits on the number of transactions.
4.  Free ATM access.
5.  Easy online access and ability to process transactions online.
6.  Competitive interest rates (especially relating to savings).
7.  A well developed financial program for debt-challenged situations.
8.  Flexible repayment plans on loans.
9.  A savings account linked effectively to a chequing account leading to the offset of fees.

Banks are beginning to change their thinking because they have to.

I don’t want to make this about politics, but the truth is that when we look at what has happened south of the border, there is a clear message that has been sent out and is reflecting the reality that the “status quo” is not serving the needs of average citizens.  We are all struggling with economics.  Every account matters.  And your account, along with millions of others, keeps the economic engine moving.

It’s time you create the account that serves you.  You do not serve the bank.  They serve you.  So, look for that account.  And that is how you will find the right bank.