4 Reasons You Should Never Stay Loyal to Your Bank

Most of us were taught as children that loyalty is important, and it is -- sometimes. It's important to be loyal to our family and friends. It's even important to be loyal to deeply held beliefs. But gone are the days of loyalty to a bank that may cost us money. As tough as it can be to break away from an institution you once felt a sense of loyalty toward, here are four reasons you might want to consider it.

1. Fees are a ridiculous waste of money

While some banks advertise "fee-free" accounts, Americans are still spending, on average, around $14 per month for the privilege of having a bank account. For those who sometimes deal with insufficient funds, the monthly total can be much higher.

Boiled down to its simplest form, banking works like this: We deposit money. The bank uses some of that money to make investments that can result in profits, and it uses some of the money to loan us money. Consumer loans carry interest rates that also profit the bank.

Of course, there are unnecessary fees. Any money we pay as customers only adds to the bank's bottom line.

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Paying a bank for the privilege of allowing it to use our money is an outdated practice and one that most bank customers should not have to deal with.

If you're still paying fees for everyday banking services like checking or savings accounts, you should know that plenty of banks provide those services for free.

2. Rates vary dramatically

I don't know about you, but when I was young, I assumed that all interest rates paid on deposit accounts, like savings and certificates of deposit (CDs), were pretty much the same. In other words, I believed that the rate I was offered by my home bank was the same as the rate the folks banking down the street were offered.

Nothing could be further from the truth. Rates vary based on many issues, including how much overhead a bank carries.

If you're sticking with your bank even though your money could earn a higher interest rate elsewhere, it's time to consider other banks.

3. It's possible to outgrow your bank

When we're just starting out, things may be a bit more black and white. It's possible that we barely have enough money to cover our bills and can't begin to think about investing in interest-bearing deposit accounts.

However, as our situations change, so do our banking needs. Let's say you're about to send your first child off to college and want to open a student checking account for them. If that's not something you can find at your current home bank, it's okay to look for a bank that provides the service.

4. Your bank doesn't help pay your bills

Ultimately, we're responsible for our own financial situations, including how comfortable we are in retirement. Unless your bank charges no silly fees and offers competitive rates on your deposits, it's doing nothing to help you prepare for your golden years (or anything that happens between now and then).

Every penny you save today by not paying fees and by earning interest on the cash in your deposit accounts is money you'll have available for the future.

Fortunately, there are a lot of great banks out there, and if you're making deposits with one of them, congratulations! You're on the right track. However, if you have a niggling doubt that your bank is doing you wrong, feel free to look around for a new one. We won't tell anyone.