A banking solution … long-term-ish.

More thoughts after my big old rant about the banking industry earlier tonight … mainly, even though we literally spent like two hours at our local Wells Fargo last week updating accounts and rearranging things, and even though the lady was super-nice about it all, I just can’t help but think that if I’m really against all of this predatory banking crap, we really shouldn’t be banking with them.

Go figure – Sara actually has an account with one of the local credit unions from her teaching days that we’re trying to move away from … albeit it’s not the greatest account in the world.

Still, I pulled up the terms for Grow Financial – another one nearby that literally just opened a new branch 6.2 miles from my house – and well, the difference is kind of staggering…

Checking Accounts

  • Wells Fargo – earns 0.01% APY on any balance over $500; would have a monthly fee if not for my mortgage being with them
  • Grow FCU – they offer a regular “free” checking that doesn’t gain interest, but also a Grow Green Checking that offers a whopping 2.50% APY on balances up to $5,000 (with conditions on direct deposits, debit card use, and e-statements), and then 0.15% above $5,000.

And just to be clear, using an example $5,000 balance for each – in one year’s time, Grow would pay out $125 in interest while Wells Fargo would pay out $0.50. 😯

Savings Accounts

  • Wells Fargo – earns … the same as my checking at 0.01% APY; they had a money market account that I was trying to get, but the terms were confusing and the bump would’ve only been up to 0.03% or 0.05% anyways
  • Grow FCU – basic savings is 0.10% APY … still not great, yet 10x what their competition offers! Also has another option for a Get Fit Savings where you can only deposit $400/month, but you earn 0.35% APY instead and when you reach $10,000, they give you $100.

Comparisons: On a $5,000 balance, Wells is at $0.50 (0.01%) / $1.50 (0.03%) / $2.50 (0.05%), whereas Grow is looking at $5 (0.10%) and $17.50 (0.35%).

Credit Cards

  • Wells Fargo – this was a very sore subject that inspired my last post – interest rate they offered was between 12.15% – 25.99% and they settled on giving us 21.15%. 🙁 Only upside is that it does offer 0% interest for 12 months, which we’ll probably be exploiting.
  • Grow FCU – they seem to offer a range of 11.24% – 15.24% for similar rewards cards, with introductory rates from 1.99% – 8.99%. Also notable, however is that in their penalty terms, if you pay late twice within 12 months, your rate jumps to 18% for six months, NOT INDEFINITELY!!! This is such a pet peeve with Chase, I want to punch somebody right now just thinking about it…

And of course, there are other accounts to compare, too, like our mortgage (which Wells does better) and my business accounts and so on … and I think that’s where this all starts to get complicated because I think what’s really holding me back from switching right this second (or at least when they open in the morning) is a few things:

  1. I don’t want to be that asshole who just took up two hours of the bank lady’s time last week and is now telling her, “Nevermind – close ’em all out…” Granted, I could always go to another branch or do it over the phone or something, but it’s a hassle.
  2. I don’t think our credit can survive moving everything at once. Case in point, we had a hard enough time getting the credit card and that came in at a rate that nearly had me doubled over when I opened the envelope! Whereas Wells Fargo is sort of working with us to help refinance and consolidate some things (with the 0% for 12 mos, and also a line of credit for another loan), there’s no way the credit union will be able to do the same things after we just opened everything at Wells Fargo a week earlier.
  3. We now have a lot of our banking at Wells Fargo. Because this was my original point – to get everything under one roof because it would be easier! My mortgage is there, my one credit card is there and we’re about to have another, plus our checking and savings, and they have investment options (I have no idea what their terms are for this – haven’t researched it yet). I do all of our finances each month, and the idea of being able to just do simple transfers between accounts seemed like such an easier way to do it…

Yet I think I know what the right thing to do is … at least in the long-term.

As much as I’d love to have everything safely underneath one online banking roof, I’m just not sure how much sense it makes to keep banking with one of the big guys who A) I have so much animosity towards for doing the things that they do, and B) for having such little regard for the consumers, even though they’re eager for me to have all of these not all that great accounts with them. And it’s not like the interest that Grow is offering is life changing … I think that’s how I’ve shrugged off focusing on those numbers in the past – by just saying that they all suck right now, but then again, if/when interest rates do start to climb again, it makes only sense that a credit union would rise higher/faster than the big banks simply because they’re already ahead to begin with.

If we were to get to the point where we have upwards of $25,000 in the bank between savings and checking and whatnot, we could be looking at a couple of hundred bucks a year in interest at Grow’s current rates.

At the best possible rate that Wells Fargo offered (money market – 0.05%), I would have to deposit nearly $400,000 to see the same $200/year return in interest.


So I’m not sure what I’m going to do just yet, but I’ve got a few ideas. One is to maybe see about opening up an account and trickling a little money in each month so that we can get the hang of it. I’d really be curious to see if there’s an “easy” way to transfer money from my regular checking over to Grow like we used to do with ING before they got gobbled up by Capital One … even if it takes a few days, if we just move enough over to start some savings and maybe pay a few bills so as to meet the transaction requirements, that could be a start and a way to see if it’s actually right for us.

It’s weird because when I first started looking into all of Wells Fargo’s options for these new accounts that we setup, I was really excited because somehow it made me feel more grown-up that I was organizing my finances properly – all nice and neat in one place, and with a national bank that was a big name. My Grandpa even did some banking with them (although I think his main bank was Chase), and it felt like I was moving in the right direction because they already own my mortgage, other debts, etc…, and because via their acquisition of Wachovia, I’ve had an account with them for a long time…

And all of that is good and swell until you start to look at the numbers on the paper, and get pissed off about a 21.15% interest rate, and you start to realize that they’re in it to make money, which is why all of their APRs seem ridiculously high and their APYs seem ridiculously low.

It probably doesn’t help that I almost did this once already when we were trying to buy our house, and another local credit union gave us such a runaround on the fees and the terms of the mortgage and what we actually qualified for compared to what they pitched us, and the sign-on bonuses that we missed out on because we didn’t open accounts in the right order … all of that nonsense I think kind of bittered me to credit unions in general for a couple of years, so when a month into our mortgage we learned that Wells Fargo had bought our mortgage from the original lender anyways, the reaction was, “Cool!” instead of just “Ok…”

At the end of the day, some of this stuff might take a while because we do need to let our credit recover by paying down some of these debts that are just going to spike our scores too high for a credit union to touch anyways, but I think it’s time to start dabbling in the credit union world – especially if we can figure out a way to try a few things without diving in headfirst.

Because let’s be honest, if your bank’s CEO makes $20 million a year with your rates in the basement, he’s probably not very likely to just drop it back to $15 million a year so that you can share in the wealth, too… 😕

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