5 Warning Signs of a Bad Financial Relationship

You rely on your bank to protect your money and keep it safe. You use your accounts to pay your bills and accept your direct deposits.  Yet, the relationship with the bank needs to be much more. 

Here are five signs that it’s time to break up with your bank and seek out a better financial partner.

#1. You Are Not Getting Any Interest

When you put money into a chequing or savings account, you are making a deal with the financial institution. The bank gets a new deposit, and it’s free to use those funds to service loans, write mortgages, and conduct other business. In exchange, you should get a return on the money you put in.

If your bank is not holding up its end of the interest bargain, it may be time to look for a financial institution that will provide a better return. You might not get rich from the interest on your various accounts, but you should at least get something.

#2. Your Account is Eaten Up by Fees

Keeping your money in the bank should be better, and less risky, than putting it under the mattress. That does not mean that you cannot still lose your money.  Things like monthly maintenance fees, ATM charges, and other costs can quickly turn a positive balance into a negative one.  If your money is disappearing due to fees, it may be time for a financial checkup.

#3. You Have Decent Credit but Were Turned Down for a Loan

You rely on your bank for more than keeping your money safe. In addition to offering chequing and savings accounts, banks provide important other services like credit cards, credit lines and loans.  You need the institution holding your money to hold up its side of the financial bargain.

If you have applied for a loan or credit line from your bank and been turned down, you might want to ask why.  If the answer is not satisfactory, it may be time to move the money you do have elsewhere. If you have decent credit and were still turned down for the loan you needed, your current bank may not value you as a customer.

#4. EFT Services and Fees

EFT (Electronic Funds Transfer) allows money to be transferred electronically without using paper cheques, wire transfers or cash. It can be used for both payables and receivables. Businesses often use it for payroll, loan payments and business-to-business payments. They also use it to accept payments from customers, particularly for large invoices and recurring charges.

Banks have various systems they use for EFT payments and various fee structures. Before you sign up with a bank, ask about this service and what it costs.

#5. Online banking and Integration

You should be able to transfer money, pay bills, download statements and deposit cheques all from your computer or phone. Especially in today’s hybrid workplace, these services are invaluable. Each bank has its own system to do this. Some clear cheques quicker than others, and some charge more for online access. Ask your bank to demonstrate their online banking and outline any additional fees for these services.

The bank’s online system also needs to be able to pay all levels of government taxes.  The federal government recently announced that they would start to charge a $100 penalty for corporations that paid their taxes by cheque.  The writing is on the wall.  Make sure your online banking system can perform these types of payments.

It’s easy enough to put money in the bank and never give it a second thought.  However, your relationship with your bank is much more than that.  If you recognize any of the five warning signs listed above, it may be time for a financial checkup — and a smarter financial relationship.