Despite many choices, most don’t change banks

A key part of personal finances is relationships with financial institutions, and with big national banks competing with credit unions and local community banks, consumers have many choices.

Even so, we tend to stick with the bank we have instead of shopping around.

“The average is on the order of 17 years. People like to stick with their existing financial institution. And in some cases, it is longer than they stick with their spouses or their jobs,” said Mark Hamrick, Washington Bureau chief at Bankrate.

There are several reasons consumers are reluctant to change banks, but most of them are simply because of convenience.

“Nearly one in five of those we surveyed with a checking account use the excuse: ‘it’s the account I’ve always had.’ Another 10% say it is too much of a hassle to switch,” Hamrick said.

As for reasons why consumers like their current financial institution, one in four cite low or no monthly fees. But, surprisingly, just 6% of checking account holders cite the quality of their online and mobile tools. Just 3% cite the interest rates their bank offers them.

For consumers in the D.C. area, it might be worth the effort to compare banks, particularly because the D.C. metro’s banking landscape is so diverse.

“You look across the broad range of financial institutions around the D.C. area, and you really do have the national and international players, the regional and smaller players and everybody in between,” Hamrick said.

Bankrate says banking institutions in the D.C. area are competitive on borrowing and savings rates, and often offer better rates than national averages.

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Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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