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What to Do When Your Bank Branch Closes

Byline profile imageWritten by Michael Calleia
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Byline profile imageEdited by Marie White, CEPF®
Updated on
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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: What to do when your bank branch closes?  Do you find a new bank to keep your checking account, or do you 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.

A financial advisor can help you find the right banking solutions based on your financial goals.

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.

However, brick-and-mortar banking locations might not be the only consideration for you. What to do when your bank branch closes also depends on 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 without any ATM fees from competing banks, although they often limit the number of times you can do so. If you go over this limit, you may be charged a fee for not using a machine 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, the shutdown of your local branch might not have much of an impact.

Online banking has become an important offering for financial institutions.  The American Bankers Association found that more users use mobile and online banking than branch, ATM or phone support. More than half of customers used mobile banking apps on their smartphones or tablets, while 22% used online banking via a laptop or PC.

Online and mobile banking has become 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 bank fees don’t go up with the new bank. If they do, you might consider moving to another bank with more reasonable fees.

How to Evaluate a New Bank After a Branch Closure

When your local bank branch closes, it may be a good time to reassess whether your current bank still meets your needs. 

Start by evaluating the practical aspects: Is there another nearby branch? Does your bank still offer access to ATMs without extra fees? If the closure makes banking inconvenient or costly, it might make sense to switch. Also, check if the closure is part of a broader trend of reduced services that could affect your future access.

Next, look at the services and fees of other banks. Compare account types, monthly maintenance charges, minimum balance requirements and interest rates on checking and savings accounts. Pay attention to digital features such as mobile app functionality, online bill pay and mobile check deposit. If you are switching to an online-only bank, check whether they offer ATM fee reimbursements or partnerships with large ATM networks.

Finally, consider the bank’s reputation for customer service and reliability. Read customer reviews, and look for any patterns of service issues or complaints. If you are moving your money to a new institution, ensure it is FDIC-insured. You can also ask friends, family or a financial advisor for recommendations. 

Choosing a bank that aligns with how you manage your money can help prevent future disruptions and make daily banking easier.

Bottom Line

When your local bank branch closes, your next steps depend on how you typically manage your finances. If you rely on in-person services, the distance to the nearest branch may influence whether you stay or switch banks. However, if you primarily use ATMs or online or mobile banking, the closure might have little effect, provided ATM access remains intact. With the growth of digital banking, many customers may not need physical branches at all. Also, if your branch is replaced due to a merger, you may be able to continue banking at the same location, although it’s important to review any changes in fees or services.

Before switching accounts, talk to a financial advisor about the best banking strategy for your needs.

Banking Tips

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