How to Switch Banks

Your Guide to Switching Banks in 5 Simple Steps

If you’re feeling disillusioned by your current bank or inspired by a life change to improve your finances, it may be time to switch banks. High fees, unimpressive rates and lackluster customer service are all common reasons for going elsewhere, as are moving, getting married or starting a new job. Sometimes your financial picture needs a refresh.

While you may have a feeling there’s a better bank out there, actually making the switch may not seem worth the effort.  But the process can be easy if you stay organized and cover all your bases.  Follow the simple steps and use the tools provided here to make that switch today.

Interactive infographic on how to switch banks

Click on the steps that you need help with for additional information and tools you can use.

How to Switch Banks Open a new account Change direct deposit Update bills and automatic payment Re-route external transfers Close old account

Open a new account

You’ve finally found a bank that aligns perfectly with your needs. You’re excited to transfer your money over and get started. But before you do, be sure to keep a little money in your current bank and don’t close it just yet.  Here’s why: You may still have some transactions in a pending status, meaning they haven’t hit your account just yet. Checks or automatic transfers for bills might not have cleared. So, you’ll want to keep a bit of a buffer in your old account just in case.

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Change your direct deposit 

As soon as possible, you’ll want to update your account details with your employer’s human resources department. You may be required to bring in a voided check from your new account, or you may just need to provide your updated account number and routing number.

Download a useful form here.

Update your bills and automatic payments 

Once you know your direct deposit is all set up, you can start changing automatic payments for any bills you have.  Don’t forget about the automatic payments or subscriptions that may be tied to your debit card number.  Scanning through old bank account statements is a good way to jog your memory on anything and everything you may need to change.1 That way, you’ll have a comprehensive list of all the vendors that require your new debit card or checking account information.

Download a useful worksheet here

Re-route any external transfers 

If you have any external transfers set up to or from your old account, you will need to make sure that you are set up do the same transactions from your new bank. So if you had funds from Old Bank going into Bank ABC, you’ll need to make sure New Bank also has funds moving to Bank ABC. The same goes for any funds you had from Bank ABC into Old Bank.

Download a useful worksheet here

Close the old account 

Now you are ready to close your old account. You can request a refund in the form of a cashier’s check, wire transfer, or ACH transfer, which may come at a small fee. Please note that you won’t be able to close your account if it has a negative balance. You’ll need to bring it out of the red first. 

One final thing: The Consumer Financial Protection Bureau, an agency of the U.S. government, recommends you get confirmation of your account closure in writing.2 Banks can choose to reactivate closed accounts if you didn’t properly change your automatic payments or deposits, so a paper trail could come in handy if you need to dispute any charges.

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