A detailed step-by-step guide to leaving your big bank and joining a credit union

[bananas]

Came across this article in Good magazine:

http://www.good.is/post/a-step-by-step-guide-to-leaving-your-big-predatory-bank/

A Step-by-Step Guide to Leaving Your Big Predatory Bank

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Bank Transfer Day is a grassroots effort to get anyone upset with large predatory banks to move their money to nonprofit credit unions by Saturday, November 5.

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Because completely shifting your finances can be a daunting task, communications firm Fearless Revolution has come up with a detailed step-by-step guide to leaving your big bank and joining a credit union.

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Here's the step-by-step guide:

http://fearlessrevolution.com/blog/a-field-guide-to-closing-your-bank-account.html

A Field Guide to Closing Your Bank Account

Bank Transfer Day is gaining some serious steam. Although it's not technically affiliated with Occupy, it's being embraced by the movement and is the first specific call to action since the Occupy protests began four weeks ago.

The description and goal of Bank Transfer Day is straightforward: If you currently have checking and savings accounts (deposit accounts) with a big bank, the organizers encourage you to remove all of your funds, close your accounts, and place your money in a new deposit account with a not-for-profit credit union. The organizers ask that you do this by November 5. And since November 5 is a Saturday, you should definitely do it before November 5 since many big banks aren't open on weekends.

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What You Need To Do Before Walking Into Your Big Bank Branch

1. Go through previous big bank statements to see exactly which accounts you have. Be sure to check the names on each account. If you are closing a joint account with two holders, it makes a difference whether the word joining your names is "and" or "or." If the account in your name is in your name and someone else's, you will both need to go in and close the account. If the account is in your name or someone else's, either of you can close the account. Some big banks may vary on this policy, so it's best to call your big bank to find out exactly what you need to do prior to walking into your local branch.

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3. Stop using your deposit accounts ASAP. You need to allow everything to clear the accounts completely before you close them. This clearing process takes about two weeks to complete. Keep close tabs online to see which transactions are still outstanding.

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[ren1999]

1. I Approve

Let us begin. Everybody transfer their savings to a Credit
Union!

[Earth_First]

2. Welcome to DemocraticUnderground!

:hi:

10 year CU user here!

[joshcryer]

4. 10-15 years here. And ditto on that, welcome to DU ren1999!

I think I got my first CU account in, let me think, 1999, so 12 years or so. I've always dealt with Credit Unions. I actually consider them banks! (Though they're not-for-profit coops and tax exempt.)

[bananas]

13. Welcome to DU!

I peeked at your profile - I'm a time-traveler, too, except I come from the past!

[joshcryer]

3. Nice post!

[seaglass]

5. I think they missed some steps. Don't most people have direct deposit

of their paychecks?

I would add some additional 1st steps.

- Review existing account and identify all auto-payments, amounts and due dates
- Identify any payees that you have auto-withdrawal agreements with (for me these are utilities, where $ amount of bills vary month to month) and identify withdrawal dates
- Identify all online accounts with debit card/checking info info saved in profile (to make sure you don't inadvertently make purchases on a closing/closed account)
- Contact employer to determine process and amount of time needed to change payroll to a new direct deposit account

Then it is a matter of timing to coordinate between the old account and new. Not everyone will need to take these steps and I'm not trying to be negative, but it is not as simple as it appears for everyone.

I was reading an article last weekend that stated the reason that banks offer free online banking is because it's a great customer retention tool. Up to 95% of people who use online banking/bill pay stay with their banks because of the huge pain in the ass it is to untangle themselves.

On edit: appreciate the post bananas, it is a great start!

[joshcryer]

6. IMO the easiest way would be to open your CU account, then have all deposits go to it.

Then transfer any savings you have from your bank account into the CU, leaving the minimum balance the bank will allow. At which point you go into the bank and close out the account. I think ultimately that's the most painless way to do it assuming you don't have any loans out of course.

[bananas]

8. That's probably best - open the CU first, transfer as much as you can,

leave enough to make sure any outstanding checks and auto-pays clear (plus minimum balance),
then close the bank account when you've verified everything is correct.
And electronic transfer is probably a lot safer than carrying around a bank check.

[joshcryer]

11. Yeah, I mean, I'd have all deposits and checks already transferred to the CU.

Make it a month or so so that you know everything is clearing and setup right (there's bound to be someone who messes up some numbers somewhere and it doesn't go right away when something is supposed to clear). Then all you have to do is worry about getting your final minimum balance from the bank.

[bananas]

14. Wow, you can open an account online in about 10 minutes

I use noscript and didn't see the flash content before,
but now I enabled it and saw that the San Diego County Credit Union has a big flash graphic on their home page about Bank Transfer Day.

I clicked on it and they have a great webpage about transferring by Nov 5,
including a video of a local tv news channel interview with the SDCCU president.

The home page: http://www.sdccu.com
The webpage about Bank Transfer Day: http://www.sdccu.com/pages/home/specialoffersMaster_1011SwitchToSDCCU.asp

I usually prefer to do things like this with a live person at the bank, to make sure I didn't miss something or mess up, also they often have additional useful information that I wouldn't think to ask.

[FarCenter]

9. The easiest to close would be savings accounts

On those there would not be outstanding checks, automated transfers initiated by the bank or third parties, etc.

You could close the account, dump the savings into your demand deposit account (checking, money market fund, etc) and then write a check to open your new CU account.

Beware restrictions on withdrawal from the savings accouts. Savings accounts also only post interest on specific dates and if you close the account you lose any accrued but unposted interest. Since interest rates are really meager, this shouldn't be a factor for small accounts.

Another issue for checking accounts is whether recent deposits have become "available funds" for withdrawal.

[catabryna]

7. Important thing to remember...

If you have any accounts that you abandoned because of overdrafts, etc., you will need to clear that up as any old account that has a negative balance will show up on ChexSystems.

Until that is cleared up, you will likely be unable to open a new account at any financial institution, including credit unions.

[bananas]

15. That's a very important reason to open the CU first!

"Until that is cleared up, you will likely be unable to open a new account at any financial institution, including credit unions."

If someone misses something (they might even be unaware of it), they could be really stuck.
There are always snafus, best to be safe.

Thanks for pointing that out!

[NYC_SKP]

10. I would have accounts active in both banks for at least 60 days...

...while I shift direct deposits and automatic payments over from one to the other.

Otherwise, a very helpful post!

:P

[joshcryer]

12. Yep, agree. Kick for CU support! :D