Several factors come in to play when determining which bank or credit union may be right for you. Despite recent consolidation within the Massachusetts banking industry, numerous choices and options remain relative to where you bank. Below are some issues you may want to consider prior to establishing a deposit relationship.
Products & Services
Today, most banks and credit unions offer a wide variety of deposit, credit, and other related services. You should determine exactly what products and services you are looking for in your banking relationship and determine which bank or credit union can best fulfill these needs.
Different people have different banking habits. You may visit your depository institution weekly or conduct nearly all of your banking business without ever actually going into your bank or credit union. Depending upon your preferences, you should consider whether you need a financial institution that has few or multiple locations.
As part of this process, you should also consider whether you work a considerable distance from your home. If so, is it more important for your depository institution to be located close to home or close to work? Or, do you want to be able to access locations both at home and at work?
Many people enjoy banking in an environment in which all of the employees know you by name. If this important, you may be more interested in a smaller community bank or credit union. Such institutions may be able to provide customer focus and personal contact to a greater extent than large regional institutions.
If you use an ATM card frequently and like to access your account(s) from multiple locations, you will probably want to consider a bank or credit union with a large ATM network. Another option would be to consider a depository institution that is a participant in the SUM network (a surcharge free network of Massachusetts banks and credit unions). A listing of participating financial institutions can be found on the SUM network's web site at www.sum-atm.com.
Either will allow you to avoid ATM surcharges. Also, check to see if your depository institution imposes network or interchange fees for using another bank's ATM.
If you prefer to do your banking business from your home computer, you should consider a bank or credit union that offers this capability. More and more banks are offering computer banking options. Talk with bank or credit union representatives to determine which may be best for you.
A review of how different accounts are structured and the associated related fees is also very important. Fees will likely vary based upon your balance and the number and type of transactions you make.
You should consider how large a balance you plan on maintaining in your banking account(s). Many financial institutions waive various checking account fees if a large enough balance is maintained. But, check to see how the bank or credit union calculates minimum balances (e.g. average daily or monthly balances).
Consideration should also be given for the number of transactions you will perform monthly. This will include check writing, ATM transactions, and point of sale transactions. Some financial institutions charge for each transaction while others may cap the number of transactions that will not be charged.
Finally, account features should be carefully reviewed so that you know when you will incur certain fees (i.e. use of foreign ATM).
State and federal Truth-in-Savings Acts require banks and credit unions to disclose all account fees in advance. Use these Truth-in-Savings disclosures to comparison shop.
Mass. Elders and Minors
Under state law, Massachusetts state-chartered banks are required to provide no cost checking and savings accounts to any persons sixty-five years of age or older or eighteen years of age of younger.
Some federally chartered banks also have special accounts that may offer reduced or limited fees.
Basic Banking Program
Individuals unable to maintain large bank balances should consider low cost banking account alternatives.
Over 80 percent of the Commonwealth's bank branches participate in the voluntary Basic Banking for Massachusetts program.
The Basic Checking Account features a maximum monthly charge of $3. This account allows a minimum of 8 free withdrawals a month and a $10 minimum balance. The Basic Savings Account features a minimum deposit requirement of no more than $10, a minimum balance of no more than $10 to open and maintain the account, and a maximum monthly charge of $1.
A listing of all banks that participate in the Basic Banking Program as well as a description of the program's low cost bank account is available at the Basic Banking for Massachusetts web site.
For further information and Basic Banking resources, visit the following website run by the Massachusetts Community & Banking Council: www.basicbanking.org.
How to Change Banks or Credit Unions
The actual process of closing an account with one bank and opening a new account with another bank is fairly simple. This action, however, can become somewhat complicated if you are closing an existing checking account and establishing a new checking account. This will likely require you to open a new checking account before you close the first one. This will allow you to begin writing new checks while waiting for all of the checks from the older account to clear.
You may also have to complete paperwork to update direct deposit information for your paycheck and automatic deductions from your account.