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Move Your Money to Small Banks and Save

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Here's a way you can save money without pinching pennies or clipping coupons: Just move your money from one institution to another!

The general idea behind the "Move Your Money" campaign is that if you store your money in a small bank rather than a large one, you will save money and increase your overall profits. The grass-roots effort prides itself on helping people save money in the current state of the economy  by teaching how to go from one bank to another. What's interesting, is the statistics they have comparing large vs small banks: As a member of a big bank, for example, you pay more fees: a large bank typically charges $35 per overdraft, compared to $25 at a small institution. On bounced checks, a big bank charges roughly $30 compared to $25 at a small bank. 

The website features step-by-step instructions on how you can save money and what to do, and it also gives customers information on which banks to avoid. (FYI, the campaign is urging customers to avoid the six biggest banks, including Bank of America, Citibank, Wells Fargo, JPMorgan Chase and Goldman Sachs.)

Here are some steps they recommend:

Move Your Money and Save!

1. Open your new account.

In most cases, you should be able open a checking account with an initial deposit of between $25 and $100. At a credit union, you'll also become a member and co-owner at the same time.

2. Order your new debit/ATM card and checks.

These typically arrive within 1 to 2 weeks. You may also want to apply for a credit card from your new local institution.

3. If you use direct deposit, ask your employer to reroute your paycheck to your new account.

When you open your new account, ask the bank or credit union for a direct deposit authorization form that includes your new account information. Give this form to your employer and anyone else who makes direct deposits to your account. It may take one or more pay cycles for the change to be made, so keep your old checking account open and watch for the switch.

4. Contact companies that direct-debit your account.

Using your last bank statement, make a list of any businesses that you've authorized to directly debit your account. Ask your new bank or credit union for an automatic payments authorization form that includes your new account information. Send this to the businesses on your list.

5. Set up online bill paying for your new account.

If you like to pay bills online, set up bill payment information for your new account. Meanwhile,stop any automatic recurring payments you have established through your old account.

6. Close your old account.

Once you have started receiving direct deposits into your new account and are sure that there are no outstanding checks or automatic debits that need to clear, close your old account. Warning: do not just withdraw the last dollar and assume the account will fade away on its own. Your old big bank may start charging you fees for having an empty or inactive checking account. Instead, follow the bank's procedure for closing out the account.

7. Enjoy your new local banking relationship!

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