Overhaulin'

Looking for a new Bank - Who do you recommend?

I have a checking & savings account with a smaller regional bank in the Cincinnati area. I never go to the bank - I pay 90% of my bills online and use my debit card for all purchases -- essentially, I rarely have paper money and rarely write a paper check. I recently had what I will call a very bad experience with my bank which resulted in me paying $190 in overdraft fees. Since then I've been shopping around for a new bank. The ones I've looked at haven't really impressed me - they seem to be no different than my current one. So, I turned my eye to the online banks (ING & ALLY being the 2 that I looked into the most) As for the overdrafs -- Let me vent -- I get paid one time per month via direct deposit at midnight on the last business day of the month. My paycheck's funds are not available right at that moment -- they are in pending status for 1 day and then are available the next day. On the same day my 6-month insurance premium was pending as well as 7 debit card transactions from that evening (dinner, target, gas station, etc -- very small transactions). I had assumed that the bank would have processed the pending transactions in the order they 'came in'. So, I thought my check would have processed first, and then my insurance, and then the 7 small transactions from that evening. Well, assumption wrong -- the bank processed the insurance premium payment, then the 7 debit card transactions, and lastly they posted my check. Because of this, I ended up with 5 overdrafts, which cost me a little less than $200. So, I call the customer service line -- and they inform me that back in July 2010 I clicked 'No Thanks' on overdraft protection & that they could not help me with crediting the fees -- that it was up to the discretion of the branch where I opened my account. Had I "signed up" for the overdraft protection I would have been notified & afforded a 1 day grace period to rectify the issue before any fees were charged. There were other optional features like applying for their credit card, automatically pulling money out of your savings account, etc -- but the 1 day grace period option required nothing more than saying OK. No application, nothing -- so why not sign all your customers up for that automatically? In my opinion, its like buying a new car and the dealer asking if you would like the (optional) seat belts and airbag! OK -- venting over -- This entire ordeal has left a bad taste in my mouth (can you not tell by my manifesto!) -- I'm looking for a new bank & am leaning towards ING Online, but I'd like to get other people's ideas & thoughts on this. Also -- if anyone is a banking industry expert -- is it common place for banks to process transactions in that order?

Public Comments

1. TD
2. I read your question. Every bank is EXACTLY the same Big banks are worse. They have much, much higher fees Also bigger banks are starting to charge for just having a checking account Some as much as $15 a month And, most are starting to charge to use a debit card Suggestion: Stick to your bank. Just be more careful. 1. Keep at least 2 weeks minimum pay in your checking at all times 2. Open a savings and tie it to your checking for overdrafts You should never live without a 6 month emergency fund - never ----- Overdraft protection would not have helped you. These were onlline pre-authorized transactions. Even if you opted in - or opted out, the same thing would have happened. They can only help you if you try to use your debit card at a store
3. I have NavyFederalCreditUnion and love them, people are great, no fees and great service. Get with a credit union. I us my credit card only because of reward points, safer than debit card, but pay it in full every month.
4. Yes, it is common practice. It is called "maximizing the revenue stream" and all banks do it to some extent. The exception is -- generally -- credit unions. The gold standard in sound money management is to maintain a minimum daily balance of no less than you largest monthly bill in your account at all times. The reason is that sound money management starts with understand yourself and your habits and then proceeds directly to the realization that the bank is a business not your friend. They will pick your pocket every single time you allow them the opportunity to do so. You should be your own "seat belt and airbags" in other words. And, they did used to be options, too, until the federal government maintained them by law and by regulation. Car manufacturers are not your friends, either. If you think you are as safe in your car as the dude driving the $80,000 Volvo or the $200,000 Mercedes, you would be incorrect.