Should I close my old bank accounts?

April 13, 2011 8:57 AM

About a month ago, I got a new checking account and savings account with ING Direct. Should I cancel my old checking and savings accounts?

For years, I had a checking account with the University of Wisconsin Credit Union and a savings account with HSBC. I switched to ING because I recently moved to NYC so it was ridiculous to keep using a Wisconsin bank (and I decided ING is a bit better than HSBC). I've transferred all the money out of the old accounts and into ING.

Should I keep the other accounts around in case I decide I can't stand ING for some reason? Or should I close them for the sake of simplicity? I believe there will be no effect on my credit score either way, right?

(I'm single and 30 years old.)

(I know that you are not an independent financial advisor.)

posted by John Cohen to Work & Money (27 answers total)

Difficulty in depositing or writing paper checks with ING are the only factors keeping me from using them exclusively.
posted by banwa at 9:08 AM on April 13, 2011 [1 favorite]

Best answer: If you couldn't stand ING, wouldn't it make more sense to just open an account with a local credit union or bank? That said, I have three checking accounts with three different banks (ING, my old hometown bank, and a large national bank with branches and ATMs near my current home), so I don't think there's anything wrong with hanging on to one extra account.

If you keep the old account, just keep an eye out for mail from your old CU, in case it's letting you know that your old account type no longer exists and now you have to pay $5 a month to keep your $0 balance account open.
posted by mskyle at 9:09 AM on April 13, 2011

When I switched the ING some years back, I kept one of my other accounts open, as I really liked having physical checks, and there are some places that don't except their mailed form checks (beucase you have to send in a check with other paperwork).

I also often felt anxious about mailing in big ol' checks for deposit, so I liked bieng able to do regular ATM deposits.

Obviously, the two accounts are linked. There's a twoish day delay in transfering money between them.
posted by Ideal Impulse at 9:10 AM on April 13, 2011

Response by poster: there are some places that don't except their mailed form checks (beucase you have to send in a check with other paperwork).

I don't understand this. If you're referring to giving a voided check, ING allows this.

I would already mail checks to my Wisconsin credit union to make deposits, which is the same way ING takes deposits. I have never, and would never, make a deposit at an ATM.
posted by John Cohen at 9:14 AM on April 13, 2011

Response by poster: I should add: the one problem I've run into with ING is that I couldn't get a cashier's check from them to put down a deposit on an apartment. Instead, I had to withdraw lots of cash using my ING ATM card, then get money orders at the post office. However, the Wisconsin credit union isn't any better in this regard.
posted by John Cohen at 9:17 AM on April 13, 2011

Best answer: UWCU is a pretty good credit union, I keep $5 in a savings account with them just to keep the account open and maintain eligibility for their various other products (vehicle loans, credit cards, free credit tracking, etc), if I ever decide to use them. They won't do anything stupid like start charging you account maintenance fees or such if you just have a membership savings account.
posted by ChrisHartley at 9:17 AM on April 13, 2011 [1 favorite]

The no-paper-checks is the main drawback in using the ING checking account as our sole account, for me. If I were in your shoes (because I need to write a paper check about once a month), I'd close the Wisconsin CU checking account at your earliest convenience and, if you can figure out a way to do so, open up a checking account with HSBC instead. From experience, I can tell you that dealing with local/regional accounts from cross-country is a hassle.

But if you think the likelihood of needing to hand someone a paper check is slim (slim enough that you're willing to, for example, get a money order instead if it every arises), I'd close both counts and just keep the ING ones. As others have said, if you decide you hate ING, explore your local options at that point.
posted by SomeTrickPony at 9:22 AM on April 13, 2011

Response by poster: I have to send a check exactly once a month, for rent. I plan to have ING send these checks, which seems easier than dealing with paper checks myself.
posted by John Cohen at 9:23 AM on April 13, 2011

Best answer: Yea, I came in to suggest what ChrisHartley said. Just keeping the credit union account open might be beneficial in the future if you need a car loan or a mortgage.
posted by cabingirl at 9:23 AM on April 13, 2011

Does UWCU give you the option of seeing a teller at a local credit union that's part of their network, should you need one? My credit union does that. I feel like having that option is important in case, say, I were to lose my wallet. Then I could go talk to a teller and withdraw money to tide me over as long as I have some form of ID and my account number.
posted by needs more cowbell at 9:25 AM on April 13, 2011

Best answer: I believe there will be no effect on my credit score either way, right?

Unless you have some sort of credit line at either bank, no. Overdraft protection might count for that, but even then it would most likely have only have a minor impact.

Should I keep the other accounts around in case I decide I can't stand ING for some reason?

Well I doubt you have earned any kind of significant benefits by being an account holder at your previous banks for a significant amount of time. It takes literally 10 minutes to open a new account at a bank online these days, so if you decide you want to switch again it is not a very difficult thing to do. If you do end up needing to write paper checks rather than using ING's check mailing you can open a new account locally, many banks and credit unions have some sort of free checking.

Personally I would close any savings or checking account I wasn't actively using, because if you get hit with some sort of inactivity fee (which they can probably start charging at any time) and aren't paying attention you could end up losing money and possibly hurting your credit score. Old credit card accounts make more sense to keep open (although it's debatable), because they keep establishing a history of being current and they increase your average account age number.
posted by burnmp3s at 9:26 AM on April 13, 2011

Best answer: I have a credit union account in Colorado and moved away about 4 years ago. I opened a local account but kept the CU account and am really glad I did. It has much better service than the local bank I use now (PNC). I use the CU account for things like car rentals, a savings account I forget about, overseas transfers to the US, etc. Plus they are much nicer on the phone :)
posted by carter at 9:27 AM on April 13, 2011

Response by poster: Does UWCU give you the option of seeing a teller at a local credit union that's part of their network, should you need one?

I don't know. Good point.
posted by John Cohen at 9:27 AM on April 13, 2011

Doesn't ING require you to have a linked account at a brick-and-mortar institution? I don't know, maybe you don't need it after you open the ING accounts, but I'm pretty sure you have to have it to begin with.

I've kept my local checking because local service providers often don't take credit cards, and they want a check right away. You (usually) can't tell the guy who fixes the furnace that the check's in the mail, or even "on its way via email." I suppose cash would be ok to pay them, but paper checks are just easier for large amounts, I think.
posted by philokalia at 9:28 AM on April 13, 2011

Response by poster: Doesn't ING require you to have a linked account at a brick-and-mortar institution? I don't know, maybe you don't need it after you open the ING accounts, but I'm pretty sure you have to have it to begin with.

I did need an existing bank account to open the ING account. I don't know that it had to be "brick-and-mortar"; I assume ING did all the transactions online and didn't care what buildings were or weren't involved. And I haven't heard of any rule that you're not allowed to have ING as your only bank once you have an account with them.
posted by John Cohen at 9:32 AM on April 13, 2011

Best answer: John Cohen--

For example, when I pay this one department at my school, I have to also include the paperwork that they sent me, signed and filled out, along with the check. I tried to sent the two pieces separately once, and it ended up being a huge hassle.
posted by Ideal Impulse at 9:33 AM on April 13, 2011

Also -- ING does not do wire transfers, and in a few circumstances you might really need this service. When I bought my house, I had to move the money for closing from my ING account to my local account, then do a wire transfer to the title company (the only way they would accept the money).
posted by philokalia at 9:34 AM on April 13, 2011

Best answer: If you have UWCU's overdraft protection (they call it a reserve line of credit) it is reported to the various credit reporting agencies and hence effects your credit rating slightly if you keep it open or close it. They may have a more integrated overdraft protection system now that doesn't report separately as a line of credit, my account is 10 years old.
posted by ChrisHartley at 9:36 AM on April 13, 2011

I believe ING does require you to have at least one linked account from another institution. I maintain a separate checking account that I keep some small amount of money in and can write checks from but do almost all my banking with ING. If I get paper checks I can mail them to ING and I pay my rent by mailing paper checks from ING. The only thing I use my other account for is writing the occasional small check and depositing cash.
posted by ghharr at 9:48 AM on April 13, 2011

Response by poster: ING's FAQ says:

Now that I'm applying for Electric Orange, do I need to close my checking account at my other bank?

You don’t have to keep your external checking account. You may decide to keep it open as you get used to electronic checking or for that very occasional check you may want to write from your checkbook.

posted by John Cohen at 9:51 AM on April 13, 2011

Response by poster: ING does not do wire transfers

How is their "Person2Person Payment" not a wire transfer?
posted by John Cohen at 10:02 AM on April 13, 2011

Response by poster: Yes, the maximum for directly transferring money from my ING account to another bank account is $5,000 a day. The alternative would be waiting a couple days for a transfer from my ING account to another bank account to go through, then doing a wire transfer from that bank.
posted by John Cohen at 10:31 AM on April 13, 2011

What's their limit on ATM withdrawals? Do you ever have a need to have, say, $1000 in cash immediately?
posted by desjardins at 12:57 PM on April 13, 2011

Response by poster: I have ING and HSBC ATM cards, and they both have a withdrawal limit of $1,000 a day. (I'm not sure about the credit union, but I stopped using its ATM card because of fees.)

I have needed to have in the neighborhood of $3,000 in cash very promptly, to be able to put deposits on apartments. This was a hassle because I had to withdraw all that cash over multiple days, then use it to get money orders. I expect to get a new apartment in about a year, so I expect to have to go through this again. This didn't stop me from getting those apartments (I put down an initial deposit of a few hundred, then paid the rest of the rent + security deposit within a few days). I've done this twice since I moved to NYC at the beginning of this year. However, it could be a problem in the future if a landlord needs not hundreds but thousands of dollars on the spot just to take the apartment off the market for me.
posted by John Cohen at 1:09 PM on April 13, 2011

ING is great, but yes the draw back is not being able to physically write checks. If you can get a free checking account with a bank in NY I'd do that and close out your bank in Wisconsin. This way you have the ability to write checks, go in to a live banker, along with other stuff you can only do with a physical bank. Keep the majority of your money in ING so you can get the interest.
posted by ljs30 at 2:29 PM on April 13, 2011

I have an ING account, and it's great for some things (mailing a check directly from the bank; easy wire transfers, particularly to other ING customers), however you cannot deposit international checks nor will they allow you to send or receive international wire transfers. I personally find this to be a pain, but if you don't expect to do any international wire transfers, you may not care!
posted by shamash at 4:42 PM on April 13, 2011

Best answer: Thanks, everyone. I will keep the UW Credit Union account open and try to find a local brick-and-mortar bank in addition to ING.

Not sure about HSBC.
posted by John Cohen at 8:09 AM on April 15, 2011