Switching Bank Accounts: A Five-Step Guide

Written By
Julija A.
July 06,2023

If you feel like you are being inconvenienced by your bank one too many times, it might be time to find a new one. However, making the change is not the simplest of tasks. So, if you are wondering how to switch banks, here is a quick step-by-step guide for effortless bank switching. 

Select Your New Bank and Account Type

The first step is selecting your new bank. There are a lot of banking options available out there for you to consider. You should do in-depth research and shop around. Here are some things to look out for when shopping for a new bank.

  • Fees and charges
  • Branch and ATM availability
  • Online and mobile banking options
  • Interest rates your can earn
  • Additional available features (for example, automatic payment options)
  • Rewards and bonuses

Changing banks is much easier if you create a list of priorities. You’ll be able to narrow this list if you can pinpoint what troubles you with the current bank. This way, you’ll know what you are looking for in different options, and the banks will be much easier to compare. For example, you might need an exceptional checking account. Or, if you’d like to save some money, you could open an online savings account or a CD account instead. 

In any case - don’t be afraid to shop around. Some banks will offer higher fees but will have more ATMs in your vicinity. Others may offer a better cashback program or cards with a high APY rate. Sometimes going for two or more different accounts instead of a single one could be the best option. It all depends on your priorities when the time comes to transfer bank accounts.

Check Whether Bank Offers Switching Services

Some banks offer switching services, which is good to check out if you are looking to change banks. These services allow automatic transfers of your payments and deposits. Some even offer to notify your old bank and close your old account. When you rely on these services, the process can take up to seven days to complete. 

If this service is unavailable at your chosen bank, a switch kit might be. A switch kit is a kit containing all the needed information for your account transfer. You'll likely receive a new account number or a routing number within one.

Open a New Bank Account

Opening a new account is relatively easy these days. Many banks offer the option to do so online. Opting for online account creation means that you only need to fill in a web form.

However, if you decide to open an account in person at a brick-and-mortar spot, you’ll have to prepare some paperwork. Typically, a bank will ask you for your name, date of birth, social security and phone numbers, as well as your mailing and email address. Some of them might ask for your driver’s license or another I.D. form to confirm your identity.

Another thing to keep in mind when working out how to transfer banks is that many will have minimum opening deposits. It is certainly something you should plan for in advance. With an online bank, you’ll likely have to provide details to an existing account. You should provide your new bank with account and routing numbers from your current bank.

The bank may make test deposits into your account to link the two accounts. It may also ask you to confirm these transactions to continue the account switch process.

On the other hand, if you are opening an account at a local branch, you should have the initial deposit amount ready in cash beforehand. Certified checks are a good option if you need to deposit a more significant amount you wouldn’t be comfortable carrying around in cash.

Set up Online and Mobile Banking

Online and mobile banking can be essential features when it comes to your banking needs. After all, no one has the time to queue in line at the bank for every transaction or payment they need to make. If you went with a fully online bank when you decided to switch bank accounts, these would likely be your only options, anyway.

Usually, you can rely on your bank to help you set up online banking as soon as you enroll. From there, you can visit your bank’s website, create a username or password, and start using your account. 

If you want to use mobile banking, you should download and install your bank’s app. Make sure you are downloading the official version of the app, though. You’ll typically use the same username and password to log in to your account. 

However, each bank has a different process set in place for this. You might have to verify your account via email or text. Sometimes, you’ll also have to set up multi-factor authentication once you switch banks and start using new apps. 

Sort and Update Your Automatic Payments and Deposits

This step is where it gets tricky and is why many people struggle with transferring their accounts. It is essential to take your time with untangling your payments and transactions. Doing this right could help you save a lot of money and prevent any unnecessary and stressful complications down the line.

How do you do this? You should consider pulling up the list of your yearly transactions at your local bank or online. It can help you see all the transactions you need to move to a different account.

If you are wondering how to switch bank accounts, here is a step-by-step guide. The first thing to set up is your direct deposits. Switching your account with your employer’s accounting team is the first step. Make sure not to forget any other direct deposits you make monthly. For example, you should transfer any irregular income you might have, freelance work, or alimony payments. 

The next step is taking care of automatic or recurring payments. For example, if you have set up automatic bill payments, you should move them to your new account. The same goes for subscriptions and recurring transfers. The latter could be quarterly insurance or your gym membership. 

Lastly, you should check all of your transactions for any linked accounts when you change banks. For example, if you use your debit card to shop online, you might have saved its details on a site or two. Updating these could help you save time, and you won’t need to deal with the hassle of having an order billed to your old card that’s now defunct. 

This is also an excellent opportunity to review your spending habits. It can help you eliminate any recurring payments you don’t want to keep and create a new budget plan.

Once everything is transferred to a new account, you should still leave some money in your old one. This way, you can cover any automatic payments or direct deposits that are yet to get through while switching banks. Also, this will help you find any recurring transactions you might have missed in the meantime. 

Close Your Old Bank Account

When all your transfers are in order, you might want to close your bank account. To avoid any complications later, don’t forget to ask for written verification. You might need it later, in case your old bank allows a transaction or two into your old account. It could cause additional fees, and having verification can help you avoid paying for those.

The closing process depends on your bank and account type. Can you close a bank account online? Typically, yes, but you might also be able to do it by phone. In some cases, you’ll have to do it in person.

Some banks have account closing fees, so you should ask about those before starting the account switching process. Some have early closing fees. If this is the case, leaving your account open until that period runs out might be a cheaper option than switching right away. 

So, what happens when you switch banks? The last step should be reviewing any final statements sent to you by your old bank. There may be some deposits left to transfer or payments that you should make.

In Conclusion

Moving to another bank can be tricky, so it is not uncommon for people to delay it as much as they can to avoid going through the hassle of the entire process. However, if you are unsatisfied with your bank or feel like you need an upgrade, dedicating the time to do a proper switch could prove very rewarding. 

So, if you are looking for the easiest way to switch banks, start by considering all your options even before you select a bank. Setting up your new online accounts should be simple. However, try to be thorough when transferring your deposits and recurring payments to a new bank. Forgetting to move everything can result in costly fees down the line.

Still, don’t hesitate to switch banks just because the account transfer process can be a pain: it’s not worth staying with a bank you are not satisfied with simply because you cannot be bothered going through the account/card transfer process.

About author

Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.

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