Many people are looking for alternatives to traditional banks for a wide variety of reasons. Some people are tired of the high fees that they are being charged at their bank. Others are concerned about the customer service that they have received or the changes that have been made to their accounts. Whatever the reason, alternatives to traditional banks have been becoming more and more popular among consumers. Here are some of the best alternatives to traditional banks available.

Credit Unions

Credit unions are the most used alternatives to traditional banks. Credit unions are nonprofit, member-owned cooperatives designed to provide members with a place to hold their money until it is needed for some other use. The members generally share something in common, such as being a member of a particular labor union, college alumni association, employer, or community. In most cases, member’s family members are also allowed to open accounts at the credit union.

Storing your money in a credit union account is just as safe as storing your money in an account at a traditional bank The balance of the accounts at the credit union are federally insured just like the accounts at traditional banks. The accounts will also have comparable interest rates and terms to the accounts available at other institutions. At credit unions, fees and minimums tend to be lower than at commercial banks, while interest rates for savings and checking accounts tend to be higher.

Money Market Mutual Funds

Another alternative to traditional banking is the money market mutual fund. Most mutual fund money market accounts require a minimum opening deposit of between $500 to $5,000 and some require that you maintain a minimum balance in the account. In some cases, you can write checks against the funds in the account, but there is usually a limit to the number of checks you can write, either per month or per year, and there may be a minimum check-writing amount of $100 to $500, depending on the account.

The money market accounts offered by mutual fund companies tend to have higher yields than the money market deposit accounts available at traditional banks. Your chance of losing money is slim because mutual fund companies make it a practice to do what they must to make sure that they maintain a constant price of $1 per share. However, while bank’s money market deposit accounts are typically insured by the FDIC, accounts with mutual fund companies do not have that protection.

There has been a lot of talk over the past few years over whether banks are still serving their customers correctly and whether it may be better to switch banks or change to a credit union. Some banks are doing an excellent job at providing the services that will help them retain customers while some others act like they do not care about their customers at all. If your bank feels more like the latter, it may be time for you to find a different place to put your bank accounts. Here are some signs that indicate that you should break up with your bank.

Lousy Customer Service

If the service at your bank has declined to the point where you are beginning to dread having to go to the bank and speak with a representative, then that is a pretty strong sign that it is time for you to break up with your bank. Many banks have declined to invest in good customer service, leading to fewer tellers available during banking hours and those few are often frustrated because they are working more for the same amount of pay to make up the lack. If you find yourself waiting in line for long periods of time and facing surly company representatives at the end of your wait, you should begin looking for another bank immediately.

Maintenance Fees On Your Checking Account

If you are paying your bank a monthly fee for them to hold your checking account, it is time for you to find another bank. Totally free checking accounts are getting harder to find, but there are still some banks that offer checking accounts that do not have monthly maintenance fees. Before opening a checking account at another bank, inquire if the account you are interested in has a minimum monthly balance requirement or other conditions that must be met to keep the account maintenance fee free. If you cannot easily meet the required conditions, do not open that particular type of checking account.

There’s Rarely A Need To Visit A Branch

If you very rarely have to visit your local bank branch for banking reasons, you may want to consider switching to an online bank. Online banks provide many of the same services as a traditional bank without having physical locations, leading to less overhead and less fees needed to generate profits. The checking accounts are often fee free and the savings accounts often have higher interest rates than your local bank’s offerings. The online bank may also offer some attractive perks to entice you into switching over your accounts. If you are already doing most of your banking online, it may be more cost effective to switch to an online bank.

As the fees that banks are charging for routine actions rise higher, many people are beginning to consider switching banks to save money. Changing your bank can get you better service at a better price, but many people resist making the change because of the perceived disruption to their lives. Because of the big changes that come with the move, some people actually dread the task and would rather pay the fees. If you are not one of these people, here are some moves you can make that will ease the stress of changing banks.

Know What Products And Services You Want

One of the biggest mistakes many people make when switching banks is not taking stock of the products and services they need before making the switch. Different banks have different banking products and the one that you are switching to may not have the same exact things that your old bank does. If you are unsure if the features are truly comparable, ask a bank representative to explain the products to you or to send you more information. Choose the bank that has the products and services that you want at the lowest price.

Research Each Of Your Options

Most cities have a number of different banking options available within a reasonable distance of a person’s home. Before choosing one for opening up your new bank account, do your research into each of the options you are considering. By conducting some research first, you can find out which ones have the best interest rates, the most services available, and the lowest fees. Some banks may even be offering incentives to people that open new bank accounts at their branches, so keep an eye out for bank advertisements sent to your home.

Check Out The Customer Service

Even though many banking services are automated or can be conducted online, you will still need to deal with the bank’s customer service representatives from time to time. You will want to make sure that the representatives are easy to reach and helpful when you need assistance. Choose an institution where the representatives answer questions easily and seem to know what they are talking about. This will be extremely useful if there is ever a problem with your account that needs to be corrected.

Make A Plan For Switching

Before making the leap, make a plan for switching your accounts to a new bank. Write down the account balances that need to be transferred, automatic payments that must be rescheduled, automatic deposits to change, and whether you will need new checks and/or debit cards. You may want to leave a little bit of money in the old accounts for a while until you can confirm that everything has been switched over to the new accounts correctly.

Over the past few years, the bad banking habits of consumers has come to the forefront as banks have raised their fees for nearly every infraction they could think of. Mistakes that used to cost you a couple of dollars now can decrease your bank account by a significant amount before you even know what is happening. These banking fees contribute billions to the banks bottom lines every year, allowing the banks to pay their top executives multimillion-dollar salaries while draining the bank accounts of the average consumer. There are certain banking mistakes that can cost you a lot of money very quickly, and it is important to know how to identify them so that you can avoid them at all costs.

Overdraft Protection On Your Account

Overdraft protection is advertised as a way for bank account holders to avoid the embarrassment of declined debit cards and bounced checks by allowing these transactions to go through and placing the account into a negative balance state. It sounds like a great idea at first, until you realize that each transaction that you make over the balance available triggers a very expensive fee, often up to $35 per occurrence. This means that 3 $5 charges made before you realize your balance is low could cost you $105 in fees. Changes in federal law has now made it where you have to opt into this service (the banks cannot automatically enroll you anymore), so you should probably consider opting out of this expensive service and having your charges declined if you do not have enough money in your account to cover them.

Not Meeting Minimum Balance Requirements

The days of free checking are nearly gone, with many banks now charging a monthly maintenance fee for all non-interest bearing checking accounts. However, these same banks will waive the fee if you maintain the minimum balance requirements for the account at all times. Review the terms and conditions of your account to see what the minimum balance amount to avoid maintenance fees on the account is and be sure to keep this amount in the account at all times, as a single slip under the limit will trigger fees for that month. If you cannot maintain the minimum balance easily, consider changing your bank account to something more suitable for your financial needs.

Using Out Of Network ATMs

Banks want you to use their ATMs instead of bothering the tellers, whom they have to pay a salary, but they penalize you if you use another bank’s ATM to withdraw money from your account. In many cases, you are charged a fee by your bank and an additional fee from the bank that owns the ATM used. These fees can add up to around $5 per occurrence, adding up quickly if using an out of network ATM is a routine habit. Many banks now have their ATMs in alternate locations, such as parking lots, convenience stores, and gas stations, to make it easier for their customers to find a fee-free ATM to use.

Consumers have been increasingly driven to seek financial alternatives to the biggest national banks in recent years. New and growing fees for basic banking products and a series of scandals have left many bank customers unsatisfied with many of the larger financial institutions. If you are considering moving your bank account from a big bank, you should take a closer look at the advantages of credit unions. Credit unions can provide some surprising advantages and can outperform the biggest banks when it comes to many basic financial services.

Credit unions are not a new concept, but many people do not understand what they are. Credit unions focus on their local community while many banks have a national or even international focus. Banks operate on a for-profit basis and exist to serve stockholders, while credit unions are not for-profit and are meant to serve members. There are many quantifiable benefits for individual consumers who are considering switching from a large bank to a credit union.

Checking Accounts

Checking accounts are the most-common deposit option for consumers, used for depositing income, paying bills and making regular purchases. Big banks have been making significant changes to their checking account offerings and fees to make up for increased regulatory costs and new limitations on their ability to charge certain fees. The potential for additional fees is high because of the frequent transaction activity of checking accounts.

Most banks have eliminated free checking accounts for most customers and many who use banks must now maintain a minimum balance or satisfy other requirements to avoid being charged monthly fees. Most credit unions have been able to maintain truly free checking accounts for their members. This translates to savings of more than $100 per year on average for credit union members.

Savings Accounts

Another benefit of credit unions is that they can also offer higher deposit rates for consumers with extra funds than the large banks do. For a basic savings account, the big banks are currently offering effectively no interest and their five-year certificates of deposit have annual percentage yields of less than 0.75%. On the other hand, credit unions are averaging more than 0.15% in interest for a typical savings account and 1.42% APY for a five-year CD.

Account Access

Some consumers are wary of switching their accounts to a credit union because they think that they will have limited access to branches and ATMs. To address these concerns, most credit unions are members of the CU Service Center network. This allows members to conduct banking transactions at any credit union within the network. Many credit union members have access to nearly 5,000 credit union branches nationwide. Many are also part of a surcharge-free ATM network, with the largest of these networks including more than 30,000 ATMs nationwide.