On one end we have the “99%” occupying not just Wall Street but public parks, bridges and roads and on the other, we have the 1% occupying everything else and who have our lawmakers literally at their beck and call. They even have lobbyists masquerading as presidential candidates and of course, all the money in the world!
But what if you don’t belong to either camp? You are not the 1% but you don’t necessarily agree with the “99%”. Isn’t it a prime tenet of capitalism that businesses should be able to charge what they please and that the market should decide what’s sustainable?
Occupy WallStreet and Move Your Money movements have cost banks dearly. The banks won’t reveal numbers, but according to the Credit Union National Association, Credit Unions added 650,000 new members bringing with them a staggering $4.5 billion in just 4 weeks!
According to the Move Your Money website, 10 million accounts may have been moved since the movement began in 2010.
“I’m happy with my Big Bank”
But what if you are a satisfied customer of a big bank? You’ve never attracted a fee simply because you were able to abide by their rules.
- You were able to avoid the $12 monthly maintenance fee by maintaining an average daily balance of $1,500 or more
- You never had to chat up a teller thereby avoiding the $8.95 ‘pay to speak with me‘ fee
- You avoid the $35 overdraft fee by keeping a sufficient balance
- You avoid the $0.50 charge by entering the correct pin every time you use your ATM card
In short, you are not the 1%, but nevertheless, these fees don’t affect you.
Is it worth switching to a Credit Union?
For someone who is not living paycheck-to-paycheck, who has no beef with Big Bank’s minimum balance requirements, is it worth switching to a Credit Union?
Let’s say you could afford to save $500 every month for the next 10 years in your checking account. This could be from your direct deposit at the end of the month or could be from your tax refunds. But for this experiment, let’s assume you can manage to swing this. You don’t attract overdraft fees or monthly maintenance fees by keeping the required balance at all times during this period.
At the end of 10 years you would’ve earned $3,451.83 in interest alone if you switched to Alliant Credit Union.
At the end of 10 years you would’ve earned $0 in interest if you were to keep the money with Bank of America.
Alliant Credit Union pays interest on your checking, a darn good one too (relatively speaking) at 1.10%, as of this post. Bank of America pays zilch for checking accounts. One assumption I’ve made here is that the interest rate remains the same for the 10 year duration at the current rate of 1.10%. In reality this is bound to change with the prime rate. Right now this is at an all time low and will only go up in the next 10 years (so the $3,451.83 should be even higher).
If you are wondering why I chose these two banks, I have a policy of writing only about products and services I’ve used myself whenever possible. I used to be a Bank of America customer and now I am a member of Alliant Credit Union.
But do keep in mind that not all credit unions are good and not all banks are evil. But, the big banks usually march lockstep. Have you wondered why all four banks announced debit card fees at almost the same time and all of them cancelled it almost on the same day? Well the Justice Department is wondering as well. It is currently investigating the banks for anti-trust violations.
“But I’m not with BofA”
If you think BofA has been singled out, here’s what the other top banks offer as checking account interest rate (as of this post):
Chase Bank Checking Account Rate: 0.01%
Is it worth switching to a Credit Union even if you are happy with your Big Bank?
Unless you think this is chump change, I think it is worth it. The good news is you have a choice. Laziness in this case could be costing you dearly.
How do I switch?
Bank of America has this nice resource on its website to switch from other banks to Bank of America.