Patt Morrison for October 12, 2011

The pros and cons of staying with your bank — what you need to know

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Bank of America reported today that it has reached an agreement for an $8.5 billion settlement with a group of investors who lost money buying mortgage-backed securities from Countrywide Financial.

Do you want to leave your bank? Many people are talking about it, especially as some of the big players like Bank of America, Citigroup and SunTrust recently announced increased rates, new monthly debit-card fees and minimum checking account balance requirements.

Many of those new, higher fees come as the Durbin Amendment took effect this month, cutting average fees that merchants pay banks for debit transactions from about 44 cents to 24 cents. To make up the difference, banks are looking to their customers.

An August Bankrate.com survey of the largest banks found that just 45 percent of them still offer free noninterest-bearing checking accounts—down from 76 percent in 2009.

WEIGH IN:

There are some alternatives, such as prepaid cards, smaller banks and credit unions, but those all come with a set of pros and cons to weigh. Will prepaid cards charge you for deposits or withdrawals? If you switch to a credit union, will you still have convenient access to ATMs? If you’re getting ready to leave your bank, what do you need to know?

Guest:

Karen Blumenthal, columnist, The Wall Street Journal; author "The Wall Street Journal Guide to Starting Fresh"


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