Key Takeaways:

  • Although switching banks isn’t challenging, the process can take several weeks.
  • When switching banks, don’t rush to close your old account. First, you need to ensure that all automatic payments and deposit transfers are complete and that all withdrawals have been posted.
  • It’s important to compare several factors when switching banks, including fees, deposit minimums, branch locations, customer service availability and more.

Switching banks can be a smart move for your money for many reasons. Maybe you’re paying too much in monthly fees and want a fee-free account, or perhaps you’re looking to earn a higher annual percentage yield (APY) to maximize your savings.

Whatever the reason, if you’re looking to switch banks but aren’t sure how to go about it, the following steps will help streamline the process. Here’s a step-by-step guide on how to switch banks. 

Step 1: Find a New Bank

When choosing a bank, you’ll want to compare several factors, including the following:

  • Type of institution. Are you looking for a traditional bank, online bank, credit union or fintech company?
  • Fees. Make sure to compare monthly fees across account options before switching to a new bank. Otherwise, you may find fees eat into your cash over time. Just $5 a month adds up to $60 over the year.
  • Account minimums. Be sure to compare deposit and balance requirements before making the switch. Not meeting them can result in added fees.
  • Branch locations and ATM access. If in-person banking is a high priority for you, opt for a bank or credit union with plenty of branches in your area. This may mean sacrificing higher yields, however, as online banks typically offer better rates than traditional banks.
  • Added features. When switching banks, consider what features the bank offers. Do accounts earn competitive rates, provide automatic savings tools or reimburse ATM fees? Comparing benefits can help you narrow down your choice.
  • Customer service. Take a look at a bank’s customer service hours or options. Some of the best banks offer live chat functionality and offer 24/7 customer support.
  • Bonus offers. Banks sometimes offer bonuses and promotions to encourage individuals to bank with them. Scoring a bank bonus could put some extra cash in your pocket.
Pro Tip

Remember that you’re not limited to doing all your banking at just one institution. While it might make managing your accounts easier, you could miss out on additional features and higher rates by sticking with just one bank or credit union.

Step 2: Make a List of Your Automatic Payments and Deposits

The next step is to list all your automatic payments and deposits so you can switch them over once you open your new account. You don’t want to miss a credit card or utility payment or have your paycheck sent to the wrong account by forgetting to do so.

You will need your old bank account to set up the new one, so don’t close it yet. Here’s what you should make note of and prepare to transfer to the new account.

  • Automatic deposits. Automatic deposits into your account can include everything from paychecks, Social Security payments, business income, investment income, child support payments or other government benefits.
  • Bill payments. Bill payments can include mortgage or rent payments, utility payments, credit card payments and loan payments. If you have paper checks set to autofill, make a note to cancel those at this time as well.
  • Recurring transfers. Recurring transfers include payments to external accounts, such as savings, retirement and investment accounts.
  • Subscription payments. Services you’re subscribed to can include streaming services, gym memberships, software subscriptions, cloud storage, app subscriptions and more.

Step 3: Open a New Bank Account

Often, opening a new bank account is straightforward and only takes a few minutes, especially when applying online. When you open a bank account, you’ll usually be asked to provide the following personal information:

  • Full name
  • Date of birth
  • Residential address
  • Phone number
  • Email address
  • Social Security number
  • Valid government-issued ID
  • Existing bank account information to fund the new account
  • Cash or check to fund new account (if opening an account in branch)

Step 4: Enroll in Online and Mobile Banking

Once you establish your new bank account, you can enroll in online and mobile banking to manage your funds. Go online to your bank’s website to register for an account.

You’ll first need to verify your identity and provide account details before creating a username and password. Once you’ve done this, you can download your bank’s mobile app and use the same credentials to log in.

Step 5: Update Your Automatic Payments and Deposits

Here’s where that list of automatic payments and deposits comes in handy. You’ll now be able to transfer these over to your new account. Be aware that this can take several weeks. This is also a good time to review any subscriptions you may be paying for that you no longer need and take the time to cancel them.

Step 6: Close Your Old Account

Once all your payments and deposits have been transferred to your new account, and no funds are left in your old account, you can close it.

Account closure can be done online, by phone or in person. Before closing your bank account, however, make sure all withdrawals have been posted.

Once the account is closed, destroy your debit card and any remaining checks to prevent bank fraud, which can occur when sensitive information gets into the wrong hands. It’s also worth asking your bank for written confirmation that the account is closed.

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Frequently Asked Questions (FAQs)

How long does it take to switch banks?

According to the FDIC, switching banks can take several weeks. You will need to redirect direct deposits and automatic payments to your new account, which can take some time. 

Will switching banks affect my credit score?

Switching banks will typically not affect your credit score. Credit scores are influenced by credit accounts, such as credit cards or loans, not by checking or savings accounts. 

Banks don’t report banking history to the three main credit bureaus; instead, banking history is reported to ChexSystems.

Should I switch banks when moving?

Switching banks when moving isn’t always necessary, but you may want to if you’re moving out of your bank’s service area or won’t have access to in-person branches or ATMs in your new location.