Have you considered changing banks, but are afraid of the potential headaches involved? Luckily for you, there are ways to make the switch without encountering a lot of worry and stress. As long as you take the time to properly prepare yourself for the change-over, switching banks doesn’t need to be an agonizing exercise.
1. Find a new bank. First and foremost, you shouldn’t leave your existing bank until you’ve chosen a new one. Before closing out any accounts at your current bank, you should do some research to find a new bank that best suits your needs. Maybe you’re a person who’s always on the go and needs access to their bank any time of day or night. You should review banking hours, customer service availability, and ATM accessibility to make sure you’ll receive the service you need. If features like Online and Mobile Banking, or compatibility with mobile wallets like Apple Pay are important to you, you’ll want to choose a bank with the latest in banking technology. If you want a financial institution that plays a big role in supporting the community you live in, you may want to consider a community bank or credit union.
2. Open an account. Once you’ve decided which new bank you’d like to switch to, determine which of their accounts will be the best fit for you. Be sure to evaluate things like minimum balance requirements, maintenance charges, interest rates and fees, so there will be no surprises once your account is opened. You should also determine what it takes to open an account there. Can you apply for an account online, or will you need to visit a branch in-person? When you’re ready to open your account, be sure to have all of the information and documents your new bank requires.
3. Get your “stuff”. Be sure to order a new debit card or ATM card through your new bank, and if you’ve opened a checking account, you’ll want to order new checks as well. You’ll also want to download your new bank’s mobile app if they offer Mobile Banking. Now is also a good time to set up an Online Banking account with your new bank and schedule up any automatic alerts you think would be helpful in managing your new accounts. Many banks offer alerts for things like suspicious account activity, overdrafts, and account balance updates.
4. Fund your new account. If you utilize direct deposit, provide your employer with your new bank account number so those automatic deposits will start going into your new account. It’s a good idea to find out from your employer how long it will take for the change to go into effect. In addition to your regular pay, you’ll also want to check to see if your new account number will be needed for other deposits like Social Security benefits, investment earnings, or pension income. And since you’re likely to soon be making payments from your new account, you may need to transfer additional funds from your old account to cover them, especially if your direct deposit could take a few weeks to kick in at your new bank. When migrating funds from your old bank, just be sure not to drain the accounts completely, as many accounts have minimum balance requirements. You’ll also need to keep enough money in your old accounts to cover any bill payments scheduled to come out of them, or checks that haven’t been cashed yet. You don’t want to be slapped with fees on your old accounts for having insufficient funds or having a balance that’s too low. Leave enough money in your old accounts until you’re ready to close them completely. Some banks like BankFive offer a service called Switch My Bank to make this process as seamless as possible. This service automates the process of switching a direct deposit from your old bank. You can learn more about Switch My Bank here.
5. Put the brakes on checks and debit cards. You should stop writing checks from your old accounts as soon as possible. Any checks you’ve written from them will need to clear before you can close them. You should also stop using your old debit card as soon as you receive one from your new bank.
6. Update your online payments. Remember to switch your banking information for any online payment systems you’re using, such as PayPal, Stripe, or Visa Checkout. Make a list of all of the bills you pay online each month, and be sure the payment info is updated to reflect your new accounts. And don’t forget to update your debit card or bank account information for any recurring subscriptions you may have like Netflix, Amazon Prime, Blue Apron, or Spotify. If you utilize automatic bill pay through your existing bank, you’ll want to cancel all of those automatic payments and then set them up with your new bank. Or you could use Switch My Bank to update your online payments in just a few clicks
7. Confirm that everything was moved over. Many banks will reactivate closed accounts to fulfill automatic payments or honor checks that were written against the account. To avoid this, ensure that all checks you’ve written from your old account have been cashed, and that all of your automatic payments are successfully coming out of your new account, before you even think about closing your old ones. You should also double check that your direct deposits are being successfully credited to your new account.
8. Close your old accounts! Once you’re confident that everything has successfully been moved over to your new bank, you can go ahead and close the accounts you have at your old one. You can withdraw the remaining money you have there by transferring the funds to your new bank, or you can have your old bank provide you with a cashier’s check. Remember that you should only withdraw your remaining funds in cash if it’s a relatively small amount of money. And it’s important to note that the Consumer Finance Protection Bureau recommends getting written confirmation from your old bank that your accounts have been closed.
If you’ve got the itch to try out a new bank, don’t let a fear of switching hold you back. With a little planning and preparation, making the move to a new bank can be a relatively painless process. Best of luck at your new bank!