Switching Banks – How to Switch to a New Bank or Credit Union

Having a bank account makes money management much simpler. However, there are times when your bank isn’t doing all that it can for you and your money. If you relocate to a new city, for instance, you might want to switch to a bank with more branches nearby. You might also look for a new bank account that has reduced fees or higher savings interest rates.

While it might seem like a hassle, changing banks is not all that difficult. Whatever the reason might be for closing your bank account and opening a new one, there are a few steps you need to follow to ensure a smooth transfer. Let’s go through how to switch bank accounts below:

Read more: See the best bank sign-up bonuses…

1. Finding a New Bank

There are plenty of banks to choose from, from traditional banks to credit unions and online banks. Here are some of the things you should consider when deciding on a new bank account:

• Welcome bonuses
• Features and benefits (like auto bill pay, mobile check deposit, and more)
• Banking fees
• Minimum initial deposit
• Minimum balance requirement
• Savings account interest rates
• Online and mobile banking services
• Branch and ATM locations

Keep in mind, you don’t have to settle on just one bank. It might suit your needs better if you create multiple checking or savings accounts. For example, open a checking account at a traditional bank for in-person customer care, and create an online savings account to take advantage of high interest.

Read more: See the best Savings rates here…

2. Opening a New Bank Account

The simplest way to open a new bank account is online, but you can also go to a branch or get it done over the phone. Whichever method you decide, you’ll need to provide your:

• Name
• Date of birth
• Social Security number
• Email address
• Mailing address
• Phone number
• Driver’s license number (or another ID number)

After submitting all the information above, you’ll need to fund your new bank. Simply provide your old bank account number and routing number. Some online banks will make one or more minor tests before it makes the initial transfer. If you’re making the first deposit in person, you can use cash, certified checks or cashier’s checks.

DO NOT transfer all your funds to your new account. You should keep enough money in your old account to hit the minimum balance threshold (if any) and to cover any checks or automatic payments that haven’t yet cleared.

3. Enrolling in Online & Mobile Banking

Now that your new bank account is open and funded, make it easy to access by enrolling in online and mobile banking. First, head to the online site to create a user ID and password, then log into your account to confirm. After that, download the app and log in with your online user ID and password. Depending on your bank, you might also need to set up multi-factor authentication or confirm your account via email or text.

4. Making a List of Recurring Bills & Deposits

Keep your new bank working optimally for you by carrying over direct deposits, automated bill payments and recurring transfers to your new account. Make a list that includes:

• Automatic deposits (direct deposits, alimony, child support payments and government benefit payments)
• Automatic bill payments (mortgage payments, utilities, credit cards and student loans)
• Recurring subscription payments (streaming services and gym memberships)
• Recurring transfers (transfers to externally linked deposit accounts, retirement accounts and investment accounts)

You’ll also want to make note of any online sites that are connected to your old bank account. For example, a mobile wallet app, Amazon and other online merchants. Make note of any services you use with your old bank, including alert services, paper checks and safe deposit boxes, and cancel those.

5. Redirecting Auto-Payments to Your New Account

To redirect your auto-payments to your new bank:

• Change your direct deposits by updating your financial information at work.
• Reschedule automatic payments by scheduling future bill payment from your new account once your first direct deposit goes through.
• Go back to your list in Step #4 and address anything that still needs to be dealt it. For example, ordering checks and renting a new safe deposit box.

Make sure to also update your bank account information with service providers, such as your credit cards, cable company and cell phone carrier. You can’t rely on merchants notifying you when a payment fails, so it’s best to stay on top of things and settle bills before they become late and pile up which can then affect your credit.

Keep your old bank account for at least two complete billing cycles, just in case there is any regular payment or transaction you might have forgotten.

6. Closing Your Old Account

The final step in this whole process is to close your old account. Once you’re confident that all your recurring bills and deposits have been moved to your new account, close your old account online, in person or over the phone. Make sure to request written confirmation that you canceled your bank account and inquire about any fees that come with closing an account. Destroy any remaining paper checks you have for the old account, along with your debit card.

Bottom Line

As you can see, it’s not so difficult to change banks. Some banks will even offer a “switch kit” that comes with everything you need to change banks smoothly and efficiently.

Read more: See the best bank promotions here and the best investing promotions here.