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by Joshua Reich

Moving Your Money

Yesterday I finally closed all my accounts at my old bank. I had primarily banked with them since moving to New York five years ago. Last year, a computer error resulted in thousands of dollars being withdrawn from my account by mistake. Sure, it was a ‘mistake’, but it still took them weeks to resolve it. Needless to say, this was a huge hassle. Soon after, I stopped using them and tried a range of different banks, settling on USAA. I guess it was laziness, but I never got around to actually closing down my old accounts. I just kept them around with zero balance. Woops.

Switching banks is much easier than you think it is. If you are unhappy with your bank, vote with your feet. However, there are a few traps that you need to watch out for. One of those traps caught up with me yesterday, finally prompting me to close down the accounts.

While my wife and I stopped using our cards, we forgot that our Amazon account automatically drew from one of our checking accounts. Having no money, this checking account was automatically overdrawn, piling up fees and drawing cash from our (unused) credit card. We only noticed when we received an automated alert from Yodlee. It costs a tiny tiny fraction of a cent to send an email. Yodlee and others send them out for free. My old bank made it a complete pain to set this up. We set it up for some accounts, but not for others. Its not too hard for a bank to be proactive, but instead they seem bent on improving their images with lavish marketing campaigns instead of taking steps to improve their service.

Banks make it as difficult as possible to switch. Imagine the outrage if a modern web company tried to enforce customer lock-in like banks. Luckily, there are some of us who believe that helping you do what you want is more important than customer lock-in. A few months ago we had the pleasure of meeting the CEO from Find A Better Bank. His service helps customers narrow down the selection of banks that are best suited to them. This includes some cool technology that reports on how long it takes to get to speak to a real person when you call customer service. They recognize that switching banks is hard, and we really look forward to the release of Bank Switcher, which takes care of all the lose ends when moving your money when you decide to do so. This includes importing all of your bill payees and finding recurring direct deposits and withdrawals.

What are your biggest fears when it comes to moving your money?