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Rating your bank
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May 17, 2000: 9:24 a.m. ET
Consumer Reports survey lists top banking institutions in the country
By Staff Writer Rob Lenihan
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NEW YORK (CNNfn) - If you haven't reviewed your bank's performance lately, maybe now is the time.
In its June issue, Consumer Reports opens up the vault on the banking industry, providing readers with the resources to find the best banking deal. The report includes the best deals for checking in 12 major metro markets, rates of top national and regional banks and a listing of seven Internet-only banks that offer free checking accounts.
Associate Editor Ellen Braitman said a readers' survey found 12 years to be the median time people stayed with their banks.
"That's practically a lifetime, given the fast pace of change in the industry," she said. "If you've been reordering new checks for your old bank account without reviewing your current banking options, you could be missing out."
Braitman said your bank account should reflect your needs -- whether you write a lot of checks or use the ATM often, the account should be tailored to how you use it.
Catherine Pulley, spokeswoman for the American Bankers Association, said financial services is one of the most competitive industries in the country.
"Customers are the most powerful force in the marketplace," she said. "We've found that if consumers shop around, they can find the services they want at the prices that suit them."
Smaller is better
In banking, size really does matter -- specially if it's small. Braitman said the best deals are from smaller banks.
"Larger banks required a higher minimum balance or charged a high service fee," she said.
The ratings of the 20 top national and regional banks include the readers' judgment of both tellers and bank officers, and their opinions on the bank's number of branches and hours of operation.
Consumer Reports found that, overall, readers were fairly well to very satisfied with their financial institution. However, Braitman said credit unions scored higher than banks in the satisfaction factor.  The survey found 88 percent of credit union customers were completely satisfied or very satisfied compared with only 63 percent of commercial or savings bank respondents.
SunTrust Banks Inc. (STI: Research, Estimates), which serves Alabama, Florida, Georgia, Maryland, Tennessee, Virginia and Washington D.C., got the highest rating on the Consumer Reports survey, with respondents saying they were "very satisfied" with the bank.
South Trust Bank (SOTR: Research, Estimates), which serves Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee and Texas, was in second place, followed by HSBC Bank, serving Florida, California, New York and Pennsylvania, and Wachovia Bank, which serves Florida, Georgia, North Carolina, South Carolina and Virginia.
Some of the lower rated banks included US Bank, Fleet, which merged with BankBoston in 1999 to form FleetBoston Financial Corp. (FBF: Research, Estimates) and First Union (FTU: Research, Estimates), which came in last in the overall ratings.
Web banks spreading
Consumer Reports also took a look at Internet banking. About 10 million people do some banking by computer, and most banks offering Internet access to accounts provide it as a supplement to their traditional accounts. Internet-only banks exist in cyberspace and they have both the cyberworld's problems and pluses.
Among the negatives, Consumer Reports said, cyber banks have no branches, so you'll need direct deposit or you'll have to mail in your checks. Internet banks, with a few exceptions, don't have their own ATM network, though they will reimburse you for the cost of about four transactions per month using another bank's ATM.
However, Internet banks typically require a lower minimum balance to avoid monthly service charges. On interest bearing accounts, Internet banks have an average yield of 3.7 percent, while traditional banks offer just 1.05 percent. And most Internet banks let you pay bills at no extra charge. Bricks-and-mortar institutions typically charge about $5 a month for bill-paying service.
Cut the hassle
Consumer Reports recommended these steps to reduce banking hassles:
v Keep it simple. Shifting accounts from one bank to another without running up fees and penalties can be a tall order. Look for an account requiring the smallest minimum balance that qualifies you for the services you need at the lowest cost. The more bank CDs and investment accounts you maintain, the more headaches you're likely to have if you shift to a new bank.
v Automate some transactions. If available, have your pay deposited directly into your checking account and schedule your bank to make payments or transfers for most regular bills: gas, electric, auto insurance, etc. You're better off reviewing bills that vary each month or are prone to errors, such as credit cards or phone service, then pay those bills by check. Automated bill payment lets you time your payments to follow the deposit of your regular paycheck and spread them out to minimize the possibility that payments will fail to clear. Automated payment may also cut the risk that your check or transfer will be posted late by your creditor.
v Use your debit card. It's now less expensive to use a debit card to get cash from merchants than to use another bank's ATM when you're on the road. Today, 83 percent of customers pay to use another bank's ATM, while 82 percent of banks permit customers to make a free cash withdrawal while they're making a purchase with a debit card.
v Protect your privacy. Banks are free to share personal information about you with the affiliates and outside companies with which they are allied to sell financial products. Before your sign up for an account with any financial services company, check its privacy policies carefully. If you don't like what see, find yourself another bank. 
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