I opened a business checking account last week to separate personal expenditures from business transactions.
It was long overdue, but I pushed it off for so long because I already felt I had plenty of bank accounts—three checking accounts and four savings accounts at three different financial institutions: a credit union back in my home state of Massachusetts, a small local bank here in Maine, and an online account at ING Direct.
I opened my business account at Key Bank, a national chain with offices here in Maine. I chose Key because I know other local businesspeople that use them and because they offered a $225 cash bonus for opening a new checking. Reputation is most important, but gimmicks don’t hurt.
As I was telling my wife about the new account, she looked at me, raised a concerned eyebrow and said: “You don’t have a bank account fetish, do you?”
I confess: Perhaps I do.
For better or worse, banks provide much of the advertising that has enabled blogging to become a part-time business. And as much as we hate banks sometimes, we all rely on them day in and day out.
The more I’ve learned about the business of banks trying to get new customers—whether in the form of depositors opening checking or savings accounts or borrowers taking out credit cards or mortgages—the more fascinated I’ve become with the dichotomy between how banks market themselves and the features and services they actually offer their customers.
Often, I wonder, does it even matter?
Does Anything Make a Bank Unique?
Sure, there are differences among the four banks I have used, but most of them are subtle (other than the fact that ING doesn’t have any physical branches, perhaps).
But all of the accounts hold my money securely, give me online banking, and let me access my cash at ATMs and by check or debit card. The bigger national banks have slicker online interfaces than the local banks and credit unions, but they all do essentially the same thing.
In my experience, the smaller banks have some nice perks the larger banks don’t—like ATM Fee reimbursement and instant check clearing up to $1,000. Of course, I can’t visit my small banks’ branches when I’m traveling outside the area.
When it comes to customer service, I don’t have a ton of experience with my banks because I haven’t needed a lot of service. I lost my credit union debit card once, and they seemed to handle replacing it rather well, although I was surprised to be transferred to a call center in India to initially report the card missing.
The Key Bank rep I spoke with on the phone to open an account seemed helpful and competent.
My wife, on the other hand, has a checking account with Bank of America, and they can’t do anything right. They keep her on hold, enroll her in products she didn’t ask for, and have even failed to process the single request she’s called in for.
Drawing The Line
All else aside, I think most people will be best-served by established and local banks and credit unions for primary checking accounts (in fact, I’ve made this case before). Keep the money you earn in the communities you earn it. Of course, there may be times when a fat online savings account rates or an account-opening bonus lures you to a bigger financial institution. The question, of course, is where do you draw the line? Switching banks or opening too many bank accounts gets a little ridiculous. I’ve known people who “rate chase”, moving their money from savings account to savings account to take advantage of 0.10% differences in annual yields.
I won’t be doing that.
I know my wife is right. I need to draw the line at four bank accounts. In fact, I may even close one or two. But not just yet. I just want to make a few more deposits.
What about you? How many bank accounts do you have? Do you switch accounts frequently to take advantage of promotions?
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