Is Your Bank Right For You? What To Look For When Your Bank Merges | NerdWallet

Bank mergers and acquisitions happen on a regular basis. They can sometimes be confusing for banking customers, especially if your bank is the one that's been acquired. But they can also be a great opportunity for you to evaluate your banking needs and see if you want to switch your bank. Today we're going to talk about bank mergers, including what they are and what you should do if your bank merges. A bank merger happens when one bank decides to acquire another bank and combine businesses. Sometimes there won't be a lot of changes, but other times there will be drastic changes. For example, a new bank might decide to increase or decrease interest rates, cut certain accounts, or completely change its customer service options. A bank merger creates new opportunities and strategic moves for a bank to acquire new customers. And in most cases, when a bank merger happens, the new bank doesn't want to disturb old customers or make it hard for them to become customers of the new bank. According to the Federal Deposit Insurance Corporation, bank branches have been closing steadily over the past 10 years. And this trend has sped up since 2020 as a result of the COVID-19 pandemic. Though bank branches aren't closing just because of bank mergers, mergers can create something called banking deserts, where people don't have access to bank branches near them. However, a lot of banks are moving their services and products online, so people who don't have access to a branch nearby can still have a lot of the same services available to them. So what's the first thing you can expect after you hear that your bank is going to merge or be acquired? First of all, you'll receive communications from your old bank or your new bank telling you what the timeline and process is going to be. Some bank mergers keep things exactly the same, and you can have the same logins, same debit card information, same account numbers, and it becomes pretty easy to transfer from one bank to another. But in other cases, you might get an entirely new account login or a new debit card. Once the merger is underway, you may experience some technical difficulties or issues with customer service. This is usually pretty normal with mergers, as banks are acquiring a lot of new customers at once. Wait times might get longer, or this new bank may add or remove online chat as a service. Keep in mind, however, that if you're patient, a lot of these issues do tend to resolve themselves over time. So what if you decide that you don't like the new bank's products and offerings? If you decide that your new merged bank isn't working for you for whatever reason, maybe the interest rates are too low, or it's really hard for you to talk to a live human being through phone support, even after it's been a little while. You can decide that it's time to shop for a new bank. While you're shopping for a new bank, you can even keep your old account open just to make sure that your bills and subscriptions do eventually get moved out and over to the new bank account. However, if you do decide to keep your current account open, make sure that you're meeting all the account requirements like minimum balances or direct deposit requirements. That way you can avoid a fee while you do decide to shop for a new bank. So let's say you have decided to Two of the most important things to consider are getting a high interest rate and low or no fees. High interest rates can make a huge difference over time compared to low interest rates, since you'll earn a lot more money on your money over time. Let's say you have $1,000 in a savings account that earns 0.3% annual percentage yield. Over a year, you'll earn $3 in interest. Now let's say that you open a high yield savings account that has a 3% APY. Over a year, you'll earn $30, which is 10 times the amount of the original APY. And if you have an even higher balance in your savings account, you can earn an even greater return, all of which compounds over time. When you're considering a new bank, you also want to make sure that you're avoiding any monthly or minimum balance requirement fees. These fees may seem small, but they can add up over time. Besides fees and interest rates, you're also going to want to consider what kind of customer service your bank offers. If you really need in-person customer service, make sure that you have bank branches near you that you can visit. If you really want 24-7 phone service, make sure you pick a bank that offers that. Here are some ways to decide what to do if you hear that your bank is going to be merging. First of all, you can research the bank that's acquiring your bank. Usually there will be some kind of reviews or articles online about the new bank, and you can look into those and see if customers are generally happy. Beyond that, you can look at the bank's website and see what kind of products and services they offer and see if they align with what you want out of your bank. Secondly, you can consider doing nothing and just seeing how the bank merger plays out. As I mentioned a moment ago, there can be some issues with technical difficulties and slow customer service, but those kinds of issues usually resolve themselves over time. The third thing you can do is do some comparison shopping to see if there are any banks out there that work better for you and your needs. Using those tips I mentioned a moment ago, you can shop for a new bank and see if there are any services and features that are going to work better for you and your lifestyle. Finally, the fourth thing you can do is when you've decided that you do want to open a bank account, you go through the process of opening an application with that new bank. It may take a few steps for you to submit some documentation, fill out an online form, and move your money and bills and subscriptions over from your old account into your new account. Bank mergers are common, and keep in mind that your new bank wants to keep your business. But if for some reason you decide that the new bank isn't working for you, always remember that you have plenty of options of where to put your money, and there are other banks out there that also want your business. I'm Chanel Bissette, and I'm a banking writer at NerdWallet. On NerdWallet's website, we have lots of tools for you to comparison shop for new banks if you decide that your bank after your merger is not working for you. If you feel like you learned something from this video, hit like and subscribe.