According to research I found online, 73% of Dutch people are still banking with the same bank where they opened their first bank account. Banks love that kind of brand loyalty. Until recently I was part of that 73%, even though there were good reasons for switching. Nowadays it’s very easy to switch energy companies, insurance, cable companies and mobile phone providers. However, not a lot of people are willing to switch banks.
Benefits of switching
My current bank is a big bank and as such is counting on the fact that people will not switch out of convenience. I am getting paid a measly 0,05% interest rate on my savings account and the banking fees for all our bank accounts are €11,90 per month. The bank that I’m considering switching pays a higher interest account on savings accounts (0,2%) and is also paying that same interest on a checking account for balances up to €5.000. Also, the banking fees would count up to €8,59 a month, so that would also be cheaper.
In addition to financial reasons, I’m also changing banks for moral reasons. The new bank does not invest their money in weapons, tobacco but in environmentally friendly projects. Also, they don’t pay out extreme bonuses that might stimulate unethical behavior.
Then what took me so long?
This all sounds like switching banks was a no-brainer, but still, it took me quite some time to take the plunge. I already had a savings account with this bank, but it took me until last month to also open up a checking account. Truthfully, I was somewhat scared of the hassle of having to switch all automatic transfers to the new bank account. In the end, I started by switching for just my personal account and I kept our joint checking account with the old bank. There’s just one automatic payment happening from my personal account so that was not that hard. That change was made within an hour.
I also have a credit card with my old bank and because of the switch, I now have to change credit cards as well. This is because I can’t have a credit card without the checking account. I’ve applied for a different credit card, but I’ll wait to cancel my personal bank account until I get the confirmation that I’m approved for the new credit card. It’s not that I use my credit card a lot, sadly hardly points/cashback/miles can be earned as opposed to the US, but it would be inconvenient to be without one for travel or some online purchases.
The next step will be to also switch for our joint checking account. This will be more work, but fortunately Dutch banks nowadays offer a transfer service. It’s a free service you can sign up for in order to make switching banks easier. They transfer all automatic deductions from your old account to the new account automatically and inform the companies of your new banking information. They will do this for 13 months, so that should cover most automatic deductions that happen. We are planning on using this service for our joint account. To be safe I think we’ll also keep a larger cash cushion than normal in both accounts just to be sure no overdrafts happen.
Have you ever switched banks? If not, what is stopping you? What has been your experience when switching banks?