A Wisconsin-based financial adviser said people who are frustrated with high-banking fees and low-interest rates should look for a new place to do business, but to proceed carefully.
Kevin McKinley, of McKinley Money in Eau Claire, said the average checking account today is conditioned with 30 potential fees, including for new checks, balance inquiries and duplicate statements. While he said many of those fees are necessary, they’re obnoxious. However, he said the decision to find a new financial institution warrants thoughtful consideration.
"Don’t look to switch to a new place just because of the fees. The new place might have some fees as well," said McKinley. "Don’t do it just because of low-interest rates. They’re all low right now, and usually something that really jumps out as a high interest rate might be too good to be true."
Before concluding that a different bank or credit union is the answer, McKinley suggests people contact their current establishment to see if it offers a more suitable plan for their use. He said to ask about accounts that allow customers to pay less in fees or earn more in interest.
If that doesn’t satisfy people’s needs, McKinley said to start looking around, but beware of larger, more well-known institutions.
"A lot of people stay with these bigger banks because they think, 'Well, it’s better or it’s safer,'" said McKinley. "As we learned five years ago, that’s not necessarily the case, especially when it comes to consumer help and satisfaction."
Rather, he said to shop locally, starting with a community bank or credit union. The Independent Community Bankers of America website maintains a listing of nearby banks to consider. MyCreditUnion.gov has a listing of nearby credit unions.
McKinley said both options are as safe as big banks and that deposits are still insured by the government.
"Based on my experience, you’re probably going to see less fees, more service and perhaps more satisfaction from the arrangement," he said.
If a smaller, local financial institution doesn’t seem like the right choice, McKinley said there are lots of alternatives. He said some online-only banks waive all ATM fees for their customers. Other financial firms, like Charles Schwab or TD Ameritrade, offer banking services. Plus, he said online retailers such as Costco, Walmart and Home Depot offer services that are normally only granted at a bank or credit unions.
Whatever option people choose, McKinley recommends they know about the fees upfront and any limitations on the account.
Editor's Note: "On Your Money" can be heard each Tuesday at 8 a.m. on the Ideas Network. Email personal finance questions to onyourmoney@wpr.org.
