I closed my bank account because I was fed up with an annoying bank fee. I know that this might not be the best solution for everybody, but it definitely is the most effective. Banks charge for everything under the sun, and if the government imposes additional fees on them, you can be sure that they will collect the money from the consumers.
This particular bank recently implemented a new $5 monthly service charge that went into effect in December 2015. I initially thought that it was just a year end fee and I could live with it. But when I saw it appear in January and February 2016, I was done. Here is my story.
Why I Opened a New Bank Account
I opened a new bank account in 2014 at this particular Canadian branded commercial bank because I wanted to save money. My savings were not where I wanted them to be, so I decided that I would embark on a saving strategy which would allow me to put aside funds.
I initially thought about saving the money on one of my other bank accounts, but I quickly decided against it. There was that fear that I would be tempted to take up the funds when I ran into difficulty (even though I have an emergency fund.) I also felt that by saving the money on a new account, it would be easier to track and monitor.
Another reason I decided to open a new bank account was that the money was not going to be used for anything but savings. Since I had never had an account at this bank before, I thought that this bank would have been perfect.
How to Choose a Bank Account
When I was looking for a bank to open my new savings account with, I went through all of the steps that would help me to choose a savings account that was right for me.
I checked out the types of accounts that were available and ultimately decided to go with a personal savings account. I could have gone with a higher interest savings vehicle, but that would mean that my funds would be unavailable in the short term.
I also checked the banking fees. The fees were reasonable and were comparable with other banks. The $5 monthly service charge was not in place at the time, but if it was, I would not have selected this bank account.
To be honest, I did not consider other factors such as customer service and the amount of interest that would be paid on the account. At that time, I just wanted an account that I could save and gain some interest.
But ultimately, these factors changed over time and proved to be just as important as the other factors one should consider when choosing a bank account.
The Benefits of Bank Reconciliations
How many of you review your bank statements? Do you even check to see that the records match the activities that you would have completed?
I make it a point to reconcile my all of my bank statements with the little slips that the bank provides when I conduct business. I also reconcile my credit card purchases and payments to the credit card statements.
This is how I spotted the $5 fee. I check my account on a monthly basis to make sure that my account was in good standing and that there were no discrepancies.
Reconciling bank and credit card accounts on a regular basis will enable you to spot errors, identify fraudulent activity (including theft), monitor and balance your cash balances and spot any *new* charges that the bank decides to implement.
When reconciling my accounts, I verify the dates of the transactions posted; check to see if the figures stated are correct; the transaction description. I also check to see if the ending balance on the previous statement is the beginning balance on the new statement. For credit card statements, I check to see if the last payment was applied and if it matches to what I paid.
The Day I Closed My Bank Account
The day that I closed my bank account was the third or fourth time that I had visited the bank to do so. I had tried to close my bank account about two weeks before I actually succeeded. The other attempts that I made, were not successful because the bank was full and the lines were extremely long.
On one of these attempts, I asked the customer service representative which line I should join to close my bank account. She told me that I would have to join the queue which snaked around and around. I joined, but then left because the wait would have been too long.
The day that I closed my bank account the queue was long, but I did not want to wait any longer. I joined the queue and used the opportunity to observe what was going on in the bank.
There were about six or seven stalls, but only three were occupied. The section that dealt with customers opening new accounts was full (as usual!) and there was a queue forming because the six chairs were already occupied.
When I reached the teller I explained that I wanted to close my account. She asked me why and I told her the truth. I was annoyed at the $5 monthly service charge. Her response was a huge customer service fail that rubbed me the wrong way.
She said, “You do know that other banks charge you as well?” That annoyed me even more, and I replied, “Yes, I know. But I have accounts at other banks and I’m not charged a $5 monthly service charge.”
Her response should have been “I’m sorry to hear that you are leaving us, but I hope that you would give us another chance in the future should you require banking or financial services.”
Needless to say, my mood changed and I know that my annoyance was visible. She tried to engage in small talk, but I was too annoyed to be pacified. I received my funds and I was just happy to be finished with this bank, it’s unfair fees and rude staff. I’ve noted this as a lesson that choosing the right bank is just as important as choosing a bank account.
Some might argue that a $5 monthly bank fee is nothing to keep noise about, but it is the principle. Imagine that one bank has 50,000 customers and charges each customer $5 a month. That equates to $3,000,000 in earnings each year for the bank!
And on top of that $5, you have a host of other fees to pay – fees to visit the teller, fees to use the ATM, cheque book fees, paper statement fees, taxes on interest earned and the list goes on and on. And then the customer service sucks.
I closed my bank account because I had enough. I made a decision.
Don’t despair. There is still time to file your tax returns before the deadline and avoid the tax rush.
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