A Good Time to Leave Big Banks

[ 1 ] October 19, 2016 |

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Recently a prominent big bank has been in the news for opening as many as 2 million accounts without the customer’s permission. Do customers have to grin-and-bear such unethical behavior?  Certainly not!  Perhaps if they took their business elsewhere it would send a strong message that such business practices are unacceptable.

Please don’t read this as an overarching indictment on “big” banks; I believe it is healthy to have a variety of business models for financial institutions in the marketplace. Individual consumers need to decide which model works best for them.  With that in mind I would challenge these customers (maybe you) to investigate IAACU’s offering and relative value when compared with big banks.  Whether it’s a perceived convenience, or with the rationale that bigger means higher deposit rates or lower loan rates, perhaps it’s time to reevaluate.

Advances in internet and mobile banking which have been adopted by IAACU have certainly leveled the playing field for convenience. You can do virtually all your banking on your computer, tablet or phone to include opening a membership or account, transferring funds, paying other people, checking balances, receiving alerts and depositing checks.  And regarding value, our not-for-profit business model ensures you will get market leading high deposit rates and low lending rates.

It can be intimidating to switch from your big bank, but don’t let that perception keep you from taking greater advantage of your membership at IAACU. The process to move your accounts is easy if you break it into separate tasks. Whether you’re moving all your accounts or just taking advantage of a great CD, Money Market or HSA – the steps below should help you make a smooth transition:

1) Open your new account. You can’t switch banks unless you’ve got somewhere to go. Make a deposit into the account, wait for it to clear, and wait for your debit/ATM card.

2) Identify monthly bills. You can’t close (or empty) your old bank account until you set up an alternative way to pay your bills. Don’t just look through one month’s transactions. Ideally you’ll look back over an entire year; three months is a bare minimum because you may only make certain payments annually or quarterly, and those tend to be important payments (life insurance premiums, for example).

3) Redirect your income. If you have direct deposit going into your old account, start having those payments directed towards the new account. Of course you need to time this change with any payments that will come out of your old account — you may need to transfer money between your old and new accounts (possibly by writing a check) a few times before you’re done.

4) Keep your account open as long as you can afford to. It may take longer than you expect to update direct deposit and automatic billing instructions. Wait at least a month or two to be sure that everybody is using your new account information. Balance your checkbook one last time to be sure there are no outstanding checks.

5) Close the old account! You can finally close your account once you’re sure you don’t need it. Contact the bank and ask what is required to close the account. Take your money out in cash (if it’s a small amount) or cashier’s check. You can also write a check to yourself to empty the account. When you close your account, make it official — tell the bank that that’s what you’re doing so they stop paying interest and producing statements.

At IAACU our values are more than just words on paper. We exist to serve our members and advance their financial well-being, first and foremost. Thank you for your continued trust and support of this Credit Union – we offer our sincere appreciation for your membership!

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Category: CEO Corner, Featured

About the Author ()

Sean has held the position of Chief Executive Officer at the IAA Credit Union since June of 2005. In this position, he is responsible for the overall management of the $200 million financial institution, assuring financial strength while providing maximum value to its members. Also, he ensures that the Credit Union complies with all State and Federal laws and operates within the policies and expectations of the IAACU Board of Directors. He is a 1986 graduate of Illinois State University where he received a Bachelor of Science Degree in Agribusiness with a minor in Economics. He has also completed the coursework and received the CPCU, ChFC and CLU insurance industry designations. Sean served a combined 20 years in the United States Air Force and Air National Guard as an Aircraft Maintenance Officer retiring in 2002 at the rank of Major. Sean and his wife Kim have five children and reside northeast of Eureka, Illinois in Woodford County.

Comments (1)

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  1. David Warren, Sr. says:

    After spending over half my banking career working for the largest bank in America, I most certainly can relate to this post. Sean, you hit the nail on the head!! It really does come down to who we believe has our best intentions in mind and who we trust with our business.
    As members, we can choose to trust our business and our money to the credit union we own- the one that returns any earnings back to our co-workers, our neighbors, our family, and to us. Or, we can choose to do our business with a bank and watch the bank’s earnings go to faceless bank stockholders’ wallets and exuberant executive compensation packages.
    The choice is ours.

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