Consolidate banking to Alliant

[gizmotchy]

Hey all!

My credit rebuild is to a point where only time is going to help, so I'm starting to now look at ways to make my money work better for me.  To start that off, I'm re-evaluating how I handle my banking.

Current Fico Scores from CCT are in the 660-670 range.  One negative on 2 of my reports, and old student loan account with intermittent lates from 2009-2011.  That account just completed rehab and is now current, but the old tradeline is still.  High utilization currently (close to 60%), but I'll be working that down over the next year or so.

Currently I have my primary checking and a savings account with a local brick & mortar bank.  I've been with them for close to 7 years now, and my parents have banked with them for over 30.  But, they are a very small bank (only 3 branches).  Most of my bills funnel thru that checking account right now, and I use the savings for my estimated income tax payments that I have to send in every quarter.  Last year I opened checking and savings with the nearest local credit union, which is about 45 mins away.  However, I basically do not use those accounts anymore, as it is hard to do deposits - their online banking as no ACH capability, nor does my small local bank.  They are also not part of the Credit Union Co-Op network.  I opened a simple savings account with Alliant, and am currently doing ACH transfers from my checking into that for an emergency fund.  I also have a brand-new auto loan at 3.99 APR with another credit union that my dealership partners with, but closest branch with them is about 90 mins drive away.  Lastly, my wife is about to start a new job as a part-time teller with another local banking chain, and plans to open a checking account with them when she gets her first paycheck.

I'm starting to consider that I'd like to consolidate most of my banking needs to Alliant.  Their savings is much higher yield than either of my existing accounts.  Plus, their portfolio of services is much larger.  Being able to manage most of my accounts from a single web interface would be much easier, in my opinion, and I rarely ever actually need to go into a branch.  I'd like to start up an IRA account, as well as try to do a little bit of investing.  I plan to have our current auto loan paid off in 3 years, and will probably be looking at another loan around that time, plus perhaps buying a house.  Having most of my banking thru a larger credit union would, I feel, make both of these a lot easier.  Not really looking for credit products at this time, Alliant already turned me down for their credit card shortly after I opened the account.  I want to get utilization down below 20% before I go looking for any new credit at all.

So, my thinking right now is, close out my small accounts with the local credit union, and open up checking with Alliant.  Move most of my automatic stuff from my existing checking to Alliant, using ACH transfers into Alliant from my existing checking to fund the account short-term.  Once stuff is moved over, I'll change my direct deposit to Alliant, and close my existing local checking and savings.  For the times when we really need to go into a branch for something, I can use the bank DW works at, since we will have an account there as well, for her paychecks.

Honestly, I feel I need more available services from my primary bank than any of my local, small-town banks offer.  Keeping one local account is a good idea, but with the wife working for a bank, it just FEELS right to have an account with them.  My current bank has been good to me, but I feel I've outgrown them.

Anyone have any input to give me?  Am I barking up the wrong tree here?  Or am I doing the right thing?

[Anonymous]

As someone else who recently began the process of consolidating banks and moving to Alliant I can speak from my own experience in saying that I have been very happy there so far. If you plan to open a checking account there as well, in the new member packet there is a code for a 50$ bonus (I think you can also find the code online). While I have yet to use Alliant for billpay, the mobile check deposit apps are easy enough to use and funds post within a couple of days in my experience. The mail and checks they have sent me have also been very prompt in addition to adequate customer service.

I also joined DCU (Digital Credit Union) but have yet to receive my new member packet to get my stuff up and running. In addition I have not found the service to be as helpful as Alliant. If you do join DCU and are preapproved for the credit card keep in mind that they will probably ask for income verification which is a hassle. They offer 3% back on first 500 of savings so I put about 505 there, and around 50 in checking to get the fico score they offer. I really wanted that particular fico, because I also plan on buying a house in a couple of years and the fico model they offer is the one used in mortgage underwriting.

As for the IRA, I also just set those up for both me and my wife. We chose to go with vanguard instead of through a bank due to the lower expense ratios and our plan to use a long term indexing strategy. Fidelity and Charles Schwab are also great low cost brokerage firms as well though and may offer more functionality if you insist on buying individual stocks. In my opinion a Roth IRA will benefit you more long term than a traditional, because taxes will probably be higher in retirement then they are today.  

The reason we switched banking was a lack of proximity to my former local banks/cu and the pathetic rates we received there. The high rate checking, and savings at Alliant are tough to beat so I think it is a wise move.

It seems as though we are both at the same points on our financial journey, if you would like to see what steps me and my wife have done over the last few months just click my username and scroll through my updates.   

[gizmotchy]

Thanks for the input!  Not too worried about billpay - most of my stuff is auto-drafted from my checking accounts anyway, so all I have to do is repoint from my existing local bank to the new Alliant checking account.  I know I'm going to like having their savings for storing my quarterly IRS payments - will be nice to get close to 1% there, instead of the measly .25% I'm getting from my existing account.

Honestly, I kind of hate to leave my current local bank - they've been good to me for the last 7 years since I moved back home, and they've been good to my parents for over 30 years now.  However, I feel I've outgrown them, and since my wife now works part-time in another local bank, we feel we need to give them our local business.

I'll check into Vanguard for IRA when the time comes - need to get all my debt paid off first, before I go there.  I was somewhat dissapointed that Alliant declined me for a credit card with them, but I'll try again a few months down the road when some of my balances are paid off, and I can close a few of the store cards I have right now.