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What to Do When Your Bank Branch Closes
Is your bank closing your local branch? Don’t be surprised at what is now becoming a common occurrence. Presumably, the economy is a factor in driving banks to shutter branches to save some money. This leaves you with a big question: If your bank closes your local branch, what do you do – do you find a new bank to keep your checking account, or remain with your current financial institution?The answer depends largely upon how you bank and whether a new or newly merged bank is setting up shop in your local branch’s former location.

The Big Questions

The most important question in this scenario might also be the most obvious: Where is the next closest branch? If that next branch is located just a few miles away, that’s not so bad. If it’s five towns away, that’s a different story.

But brick-and-mortar banking locations might not be the most important consideration for you. It depends upon how you bank.

ATM Availability

If you do most of your banking through ATMs, you may not need to visit a physical branch more than once or twice a year. The ability to deposit your checks and withdraw funds from nearby ATMs may negate any need to switch to a new bank.

Some banks even allow you to withdraw money charge-free from ATMs operated by competing banks, though they will often limit the number of times you can do this. If you go over this limit, you’ll be charged with ATM fees for using a machine not in your bank’s network.

Just make sure that your bank isn’t shutting down your closest ATMs, too. This can happen: Bank of America closed 1,536 ATMs in the first half of 2012 by removing them from gas stations and malls. This resulted in a reduction of 9% of the bank’s ATMs across the country.

Online and Mobile Banking

If you do much of your banking online — transferring money and paying bills through your bank’s Internet portal — the shutdown of your local branch might not have much of an impact.

Online banking has become an important offering for financial institutions. According to comScore, more than 45% of the Internet users in North America spent part of their online time visiting bank websites in April 2012. That’s an increase of 1.2% from the same month one year earlier. The study also found that, globally, 423.5 million people accessed online banking sites in April; that accounts for 28.7% of the Internet audience during this time.

If you’re like a growing number of banking customers, you’re doing more banking by phone or other mobile devices, using apps created by your banks. Research company Forrester’s new report, “The State of Mobile Banking 2012,” predicts that the number of U.S. mobile banking users will double in the next five years to reach 108 million by 2017. To put it into perspective, that number would represent 46% of U.S. bank account holders.

Online and mobile banking has become a big business, which is good news for consumers. To cater to consumer behavior, banks should continue to expand their online banking options, making physical branch locations less important for a growing number of customers.

Keep this in mind as you consider whether the location of bank branches really matters: You might be doing most of your banking online or with your mobile devices in the near future.

What’s Coming in?

Finally, consider what will be moving into your bank’s former local branch. Maybe your bank was purchased in a merger or acquisition, and a new or merged bank might be taking over your previous bank’s branch. If this is the case, you’ll probably be able to stay at your existing branch as a customer of the new financial institution.

In such scenarios, little about your bank will change. You’ll still have access to the same branches and ATMs. Make sure, however, that rates and fees don’t go up with the new bank. If they do, you might consider moving to another bank with more reasonable fees.

Update: Have more financial questions? SmartAsset can help. So many people reached out to us looking for tax and long-term financial planning help, we started our own matching service to help you find a financial advisor. The SmartAdvisor matching tool can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to up to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

Dan Rafter
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