Skip to content
November 4, 2011 / Green America

10 Steps for Breaking Up With Your Mega-Bank

For a lot of people — those using few and simple banking services — switching banks is easy.

For others who may have multiple accounts, a number of automatic deposits or withdrawals, a mortgage, or financial life ties to a mega-bank, the break-up process might  take a little longer – but it will be WELL worth it!

To avoid problems, it may be wise to maintain two accounts temporarily (your old account and your new account) until all your financial transactions, such as automatic deposits and deductions, are shifted to the new account.

Click the jump to get started with the list, or download our new “Break-Up With Your Mega-Bank” kit to get even more information… 

Step 1.
Choose your new community development bank or credit union.  This is the exciting part! Think about all the good you’ll be doing with your money out of the mega-banks and serving community needs.  As you research your new bank, be sure to ask about fees, services, and the details about the banking products you need.

Community development institutions that belong to Green America, and are part of our screened and approved business network, can be found at in our National Green Pages™, as well as in the “Break-Up Toolkit”, or our Community Investing Guide .  You can find additional community development financial credit unions at the National Federation of Community Development Credit Unions and community development banks at the Community Development Bankers’ Association (click on “members”). For information on what to look for to ensure that a bank or credit union’s checking account practices, credit card terms, and cash advances are consumer friendly, visit the Coalition for Responsible Lending’s resource: Keep Your Balance: A Shopper’s Guide to Better Banking.

Regardless of where a financial institution is located, if you find a bank or credit union that meets your needs, you can work with them via online banking. Consider a community development bank or credit union that emphasizes lending that most matters to you, such as lending that supports environmental concerns, Native American communities, or strengthening inner-city neighborhoods.

Step 2.
Open your new account with a small deposit while keeping your first account
open. Order the products you need such as checks, debit cards, and deposit slips.

Step 3.
Make a list of all of your automatic deposits and withdrawals (payments).

Step 4.
Move your automatic deposits to your new account. If you have direct deposit for your paycheck, ask your employer to transfer your paychecks to your new account (you will likely need to provide a voided check from your new account to your employer). The same holds true for social security payments or other forms of income you receive automatically into your account. Ask for the date on which the payment to your new account will take place.

Step 5.
Move your automatic withdrawals to your new account (you will likely need to provide the routing and account numbers at the bottom of your checks).  When you know that sufficient funds will be in your new account, transfer your automatic payments so that they are now deducted from your new account. Ask for the date on which the payments from your new account will begin. It’s wise to leave a small amount of cash in your mega-bank checking account for a month after you think you have shifted your deposits and withdrawals to your new bank or credit union to guard against any unforeseen circumstances.

Step 6.
If you have only online banking through your mega-bank, make sure you have either print or electronic copies of statements and canceled checks that
you may later need.

Step 7.
Transfer the final funds from your mega-bank account to your new account once you have all your automatic deposits and payments transferred and any last checks have cleared your old account. Transferring these final funds to your new account electronically is usually the fastest and safest method to use.

Step 8.
Close your mega-bank account.  Once the last remaining funds in your old account have transferred to your new account, follow the bank’s procedures for closing accounts. Obtain written confirmation that your account is closed.

Step 9.
Inform your bank why you are breaking-up (sample letter here).

Step 10.
Encourage your congregation, workplace, or alma mater to use a community development bank or credit union if they do not already do so.  Also, if you are on the boards of any nonprofits, or live in a condo or housing co-op, you can encourage these organizations to switch too.  For congregations, download the US Social Investment Forum’s free Community Investing Toolkit for the Faith Community on their publications page (scroll down). For colleges and universities, turn to the Responsible Endowment Coalition’s helpful Web site.

When you break up with your bank, please tell us about it in the comments!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 131 other followers

%d bloggers like this: