Unless you're careful,
closing your account
can open up a real can of worms
Customers fed up with bank-merger madness are
turning to small and regional community banks for empathy. In return,
these institutions are offering a sympathetic shoulder through waived
fees and relocation packages.
As 1998 slams it way into financial history
books as the year of the bank merger, smaller institutions are courting
customers through warm and fuzzy newspaper ads and radio spots.
Before giving the bank the heave-ho -- whether
it's a case of moving to a new institution or new hometown
-- customers should give themselves at least a one-month lead time
to make the transition to the new account.
The key is to start with your checkbook first.
Balance it and make sure all outstanding checks have cleared before
the account is closed. Getting a jump-start will ensure that the
customer and bank agree on the amount of money due and bounced-check
fees won't leave the account vulnerable.
of thumb is to open a new account before closing the old account.
That way, the flow of checks, ATM withdrawals and other transactions
will be seamless. Also, make arrangements to stop direct deposit
checks and benefits at least a month before the move. Jim Schepker,
spokesman for Fleet Bank, suggests giving checks a full billing
cycle to clear through the old account before closing it.
Automatic payment deductions such as mortgage
or life insurance premiums should also be changed at least a month
While most banks can take new account information
over the phone, it's safer to provide a new address and phone number
Remove all contents from the safe-deposit box
and return the keys. Finally, let family members know that your
account is closed, so that heirs won't waste their time trying to
recover "forgotten" money in an old bank account.
banks move to help you move
If you're planning to move to another city, some banks
will court you with a relocation package. SunTrust
Bank provides a 65-page guide, videotape, map and other perks
to customers moving to Atlanta. Several hundred packages are mailed
out each month, according to Sandy Christian, vice president and
manager of the bank's relocation department. Among the welcome goodies
is a free checking account and safe-deposit box for one year.
SunTrust recently ran a promotion courting new
customers by offering account transfer assistance and waiving fees
on six different checking accounts until 2000.
"We hand-hold our customers because it
can be a tough transition if you're moving to another city and you
get stuck without access to cash," Christian said. "I
personally like to have money at both ends of the rope."
Unexpected moving snafus, such as the moving
company only wanting a cashier's check, a grocery store that refuses
to take an out-of-state check or a flat tire en route to the new
home, all make for instant-cash scenarios, Christian said.
"We recommend at least three weeks to get
your new account set up, that way there's a strong possibility you'll
have checks and a debit card in hand when you arrive in the new
town," Christian said.
banks make out-of-town moves easier
Mergers between banks such as Bank
of America and NationsBank
have aimed to create coast-to-coast banking and ATM networks. With
that in mind, most large banks don't rely on in-branch visits to
close accounts. Customers can process their requests through the
bank's telephone call center. Be forewarned though: Ask if there
will be a charge for assistance or a fee for closing the account.
Last year, First
Union started implementing a $10 close-account fee but abruptly
did away with the charge. Now, customers can transfer accounts within
the bank's "footprint" or close an account for free, said
spokeswoman Tara Bullock.
"The easiest way to make sure no checks
will bounce on your old account is to have money set up in the new
account, just in case," Bullock said. If a check bounces in
the old account, the customer can ask that the fees be extracted
from the new account.
NationsBank, however, charges a $10 fee if customers close a checking
account within six months of opening it. The North Carolina-based
bank recently completed a merger with Bank of America and now boasts
4,854 banking centers and 14,000 ATMs from California to the East
"The idea is we try to spend considerable
time with the customer to identify the right kind of account for
them, so this is a processing fee," said Jerri Franz, a NationsBank
spokeswoman. "If you decide to switch to another bank product,
there is not a fee."
Like many banks, Boston-based Fleet
Bank introduced "borderless banking" two years ago
so that customers can conduct transactions at any of the bank's
1,200 branches and 2,500 ATMs. "Each customer is recognized
as a Fleet customer regardless of where they are (in the network),"
said Fleet's Schepker. "They can cash checks, talk to the teller
and we have 1-800 telephone call centers, to put you in touch wherever
Fleet's funds availability policy says the bank
will clear local checks within two business days and non-local checks
within three business days.
Financial institutions are required by law to
post their policies on when money becomes available, including checks
and deposit clearance.
payments can keep going and going
Under federal law, the customer must call or write
the financial institution requesting a stop on automatic payments
at least three days before the scheduled debit. If an oral request
is made the bank may require a written confirmation within 14 days
of the initial phone call, said Robin Leonard, a consumer debt attorney
and author of Money Troubles: Legal Strategies to Cope with Your
"The key is dealing with the business doing
the automatic deduction," Leonard said. "You certainly
start with the bank but you've got to talk with your mortgage company.
Surprisingly, we've heard it's been a nightmare for people who have
joined the health clubs and have tried to stop the payments."
-- Posted: Nov. 10, 1998