Bank Transfer Day: politics aside, it just makes sense

November 5th is Bank Transfer Day, when everyone who keeps their money in big, for-profit banks is supposed to close their accounts and move them to a not-for-profit credit union (CU). This is different than the run on banks that preceded the Great Depression, since nobody is recommending you put your cash under a mattress. Instead, you’re moving it from one type financial institution to another.

I’m not a huge fan of the Guy Fawkes stuff (the guy was sort of a terrorist), but this event simply makes financial sense, politics aside. Since executives at Credit Unions aren’t making big bucks like their colleagues in the for-profit banks, they’re able to offer lower rates on loans, higher rates on savings accounts, and other perks, such as reimbursing you for other banks’ ATM fees. In short, their business model isn’t built around squeezing every last penny out of you, because credit unions don’t answer to Wall Street.

My biggest gripe with CU’s used to be lack of ATMs, but if you bank with a CU that belongs to the co-op network, you have almost 30,000 ATMs to choose from.

I recommend a slow approach to changing banks. It takes a month, but if you forget about any auto-pay stuff being deducted from your old account, it won’t bounce.

Here’s how to make the switch:

  1. Find a credit union near you and open an account there. Deposit a good part of your money at the CU, but not all. The amounts are up to you.
  2. Cancel all automatic withdrawals & deposits from your old bank and move them to the new bank. (This is the most time-consuming step)
  3. Wait a month, and check your old bank account to see if any auto-pay deductions occurred.
  4. Transfer the rest of your money out of your old account and close it.
Anyone planning to (or recently did) a bank transfer? I was lucky enough to start out at a credit union, though I did have the experience of switching from one credit union to another (FirstTech to BECU). It was mostly painless.

3 thoughts on “Bank Transfer Day: politics aside, it just makes sense”

  1. I’ve been in the process for a month now, and my parents just opened 8 (EIGHT) accounts at BECU to move over their various types of savings. We had been at Bank of America since it was Seafirst.

    It’s been really easy – in fact switching to BECU has shown me a ton of stuff I didn’t know was possible with my bank accounts – it was probably possible with BOA but I’d been there so long I never bothered to change the way I banked.

    I’m pretty sure I am at the point that I don’t have any more outstanding debits or monthly bills, so I’m planning on heading to my BOA on Nov 5th and respectfully closing my account.

    I honestly think this (and buying less) are the two most important things I can do to help the movement. We donate how much money to charities every year? And we donate how much money to their opponents every year?

    Partisan politics aside, I see switching banks as a matter of ethics.

    1. Thanks for sharing your experience, Mike. I thought it was easy but it’s good to hear that at least one other person agrees.

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