A few weeks ago, I wrote about how I’d found myself among the millions of U.S. bank customers who discovered that the bank they’d come to know would no longer exist in the near future. Why? Mega bank merger. For me, it was Wachovia–then going over to Citibank, now becoming a part of Wells Fargo. For others it was Washington Mutual (Wamu) become Chase.

What does all of this have to do with frugal living? Well, I want to make sure that you make smart choices with your banking so that you can get the most for your money.

There’s still a pretty big subset of American banking customers who are plodding ahead, immune to these bank mergers and the chaos they cause. That’s because they choose to do their banking with small, local banks (probably not even on the radar of the Citigroup-like banks of the world). In fact, a recent Advertising Age article cites a Gallup study on consumer confidence in banks, and it didn’t look so good for the big guys:

Gallup’s findings show that while fewer than 25% of consumers trust U.S. banks, a much healthier 66% said they had confidence in the local banks where they do business. Both numbers are down from mid-July, but while national bank confidence dropped from 40%, local bank confidence dropped from 80%.

Other banks that consistently rank high in consumers’ minds–the credit union. Growing up my mother was a teacher, so I recall our getting information from a teachers’ credit union where she must have had an account. But union members like teachers aren’t the only folks that can take advantage of a credit union.

Some credit unions are affiliated with a house of worship or a geographic location. Others are university-run. Just this past week, I got an email from my alma mater, New York University, about the benefits of moving my banking to the New York University Federal Credit Union. As an alum I would be eligible to “join” as are faculty, staff and students.

According to a Boston Globe article, these are some of the things that you should look for in a credit union:

* Insured deposits
While deposit in regular banks are covered by the Federal Deposit Insurance Corp (FDIC), deposits made in credit unions are covered by a different governing body: The National Credit Union Administration. Like other deposits these are insured for up to $250,000. However, according to the Globe article, there is a small percentage of credit unions that do not back their deposits via NCUA. Be sure to ask before moving your money.

* Interest rates
Some credit unions can offer more attractive interest rates on savings and checking accounts, and CDs. A good way to compare what’s out there is to log onto Bankrate.com.

* Reduced or zero ATM fees
A number of credit unions are members of something called the Credit Union National Association. Through this affiliations its customers can use ATMs at other member credit unions without being subjected to usages fees that people have come to expect when they withdraw money from an ATM that their bank doesn’t own.

The NCUA can provide more information on credit unions worth checking out.

Now, I like the idea of being able to walk to my bank and deal with someone in person, as I’ve been doing for years with Wachoiva. But, like many habits, I’m willing to change what I’m used to doing if it makes sense for my well-being–in this case, my financial well being. In fact, I’m in the market right now to put some money in a CD; perhaps I should check out the credit unions nearby and through NYU.

In the meantime, I wanted to offer anyone who has an account with a bank that has just merged or been bought out: be hyper vigilant when communicating with your “new” bank.

Criminals are using these transition times to take advantage of customers’ uncertainty. Here’s what to look out for and remember:

* Emails supposedly that are from your new/old bank.
There’s been a rise in aggressive phishing emails to try to pry your personal information from you, so says a recent Wall Street Journal story. These messages seem to be your new bank reaching out to you to make sure that you can log into its new website. This can allow customers to let their guard down, because it seems logical.

* Banks never email their customers.
If your bank needs to reach you, someone will call you at home or send you something in the mail.

* Never click on a link in an email.
This is a sure way to find yourself on a fake site that looks like a real site. Go to log in and, bam, you’ve just given away your information. Instead, open your web browser on your own (not via that link) and type the company’s name followed by dot come to get to its real website.

* If a phone call seems fishy, hang up.
Even if you receive what seems to be a legitimate call, don’t give out any personal information if any situation feels at all suspicious. Hang up and dial the number that you know reaches your bank, even if your bank no longer exists. I’ll bet there will be legitimate forwarding information for you to use.