Related Articles
How to Make the Switch to a New Bank
Switching banks doesn’t have to be a headache. In fact, you may be able to do it from your phone.
How long have you been with your bank? If you’re like most, it’s longer than you can remember. The average person keeps the same checking account for roughly 17 years, even when they could get better service or rates somewhere else.1
Switching your checking or savings account to a new bank may sound like work, but it could be easier than you think. You just need to know how to switch banks so that nothing gets lost in the shuffle.
Below, we’ll walk you through the five simple steps to help you get the banking experience you deserve.
Key Takeaways
Knowing your reason for moving to a new bank may help you narrow down the choices and find a financial institution that helps you meet your goals.
It’s important to stay organized and check your bank’s requirements for closing accounts to help avoid frustration.
Researching different banks before you make the switch could help you find the right financial institution for your needs and goals.
How to Switch Banks: 5 Simple Steps to Follow
No matter what your reason for switching to a new bank is, the process doesn’t have to be difficult. You just need a plan.
While the exact steps may vary slightly depending on your situation and your banks’ requirements, these simple steps may help keep you on the right track.
Step 1: Know Your ‘Why’ and Research Your Options
Before you start looking for a new bank, consider why you’re thinking of changing banks. Are you concerned about the rates you’re getting on your savings accounts? Are you dissatisfied with the customer service experiences you’ve had or the location of the branches? Identifying your reason for switching to a new bank helps you narrow down your options.
Once you know why you’re switching, start researching your options. This may include traditional banks, credit unions, and digital banks. Watch out for neobanks and fintech companies that lack a bank charter and may not protect your money.
As you begin your search, it may be helpful to make a list of what you want from your new bank. Some features you may look for when choosing a new savings account or checking account include:
Automatic bill payment
Mobile check deposit
Fee-free banking
Higher Annual Percentage Yield (APY) on savings accounts
Online and mobile banking services
Better accessibility
Once you’ve found the right financial institution for your needs, you can start the process of moving your accounts.
Step 2: Open Your New Account
Once you know which financial institution you’re interested in, you should open an account at the new bank. This way, you have somewhere to transfer the funds when you close your old account.
The exact documents you need to open a new account may vary. But most banks ask for the following:2
Your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
A government-issued photo ID like a passport, driver’s license, or state ID card
Proof of your current address, like a utility bill, lease agreement, or a bank statement from your current bank
Money to deposit into the account (if opening an account with minimum deposit requirements)
Certain banks may require specific forms of identification, and others may require a minimum deposit amount to open a new account. Be sure to check their requirements so you have the necessary information on hand.
Step 3: Update Your Automatic Deposits and Payments
Once you have a new account open, create a list of any automatic bill payments, direct deposits, or recurring transfers taking place from your current account. It may be helpful to go through a few recent account statements to ensure that you don’t miss any.
You want to update these transfers with your new account information. Here are a few tasks you may want to take care of immediately.
Notify your workplace: If you have direct deposits set up for your paycheck or other income, update these first. You may need to speak to HR or your company’s payroll specialist to initiate the update. Remember, it may take one or two pay periods for your direct deposit to be updated.
Update your automatic payments: Go through each of your automatic payments and update them with the new account information. Just as with direct deposits, it may take one to two billing cycles for these changes to take effect.
Set up recurring transfers: If you have recurring or automatic transfers, such as transfers from checking accounts to savings accounts, update the information with your new account.
Since it may take time for automatic payments and deposits to update, it’s a good idea to leave funds in your old account to cover any upcoming bill payments. This may help you avoid overdraft fees or keep you from missing a payment.
You could also cancel automatic bill payments for a month or so and pay them manually until you’re sure your new account is set up and ready to go.
Step 4: Transfer Your Funds
Once your new account is open, you’re able to transfer money into it. Most banks allow electronic transfers, meaning you may be able to log in to your old account and transfer funds to your new one online.
The transfer process may take one to three business days to complete depending on the bank’s requirements. Keep in mind that your bank may require you to leave a minimum amount of money in your old account until you formally close it.3
If your old bank has any minimum balance requirements, be sure to leave at least that much in the account to avoid fees.
Step 5: Close Your Old Account
Once you’ve updated your direct deposits and autopayments and you’ve transferred funds into your new account, you’re ready to close your old one. Most banks ask you to verify your identity, and some may require you to submit a written account closure request to initiate the process.
Some account closures may require additional information or steps. For example, if there’s a joint account holder or if there are any outstanding concerns such as the account being overdrawn, you may need to complete additional verification steps or pay any outstanding fees.
Once you provide the required documents and the bank confirms that the account is closed, destroy your old debit cards to prevent any confusion. If you have funds left in the account, be sure to ask how those funds are distributed. Some banks may issue a check for you to deposit at your new bank; others may allow you to transfer your funds electronically as part of the closing process.4
Final Thoughts
Moving your money to a new bank account doesn’t have to be stressful. After all, you’re making the switch to (hopefully) make banking more convenient. By following the above steps, you should be able to switch fairly quickly.
Switching banks may be a great way to get a higher rate on your savings accounts or make accessing your money more convenient. Did you know that Jenius Bank’s savings accounts are fee-free and have higher-than-average savings rates? Learn more about our accounts or open one today!
Switching Banks FAQs
Here are answers to a few frequently asked questions about switching banks that may help you feel more prepared to start the process.
Does switching banks affect my credit score?
In most cases, no. Banks don’t usually check your credit score when you open a new checking or savings account. Without the hard credit check, your score shouldn’t change.
How long does it take to switch banks?
The timeline depends on the banks you’re working with and how many automatic deposits and autopay bills you have set up. While it’s possible to open a new account in as little as one day, your automatic deposits or autopay may not be fully set up for several weeks. Consider giving yourself a month or two before closing your old account. This way, you won’t have to worry about missing bill payments or not receiving your paycheck on time.
Should I close my old account before opening a new one?
It’s rare that you’d want to close your old account before opening a new one. By opening a new account first, you have a safe place to transfer your current funds.
Can I switch banks online?
It depends on the bank. As a digital bank, Jenius Bank lets you take care of your banking needs online, including opening new accounts and transferring funds from old ones. But some banks may still require you to visit a branch in person to provide identification or other documents.