How to Switch Banks: A Hassle-Free Guide


Managing your finances efficiently is a must for achieving your financial goals. An essential part of this is selecting the ideal bank account that best fits your needs. If your current bank or credit union isn’t up to par, it might be time to switch to one that better aligns with your financial objectives.

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Switching banks may seem intimidating, but it doesn’t have to be. In this guide, we’ll provide an overview of the steps to take when changing banks and explain why managing your funds effectively and securing a bank that meets your financial goals is so important.

So, if you’re looking to avoid fees, take advantage of online banking, or improve your customer service, this guide will help you through the process of switching to a new bank.

Reasons People Switch Banks

Here are some of the most common reasons people switch banks:

  • High costs and fees: One of the primary reasons people switch banks is to avoid fees. Banks and credit unions charge a variety of fees, including monthly maintenance fees, ATM fees, overdraft fees, and more. These fees can add up quickly, eating into your hard-earned money. Look for a bank that offers fee waivers or has lower fees that align with your usage pattern.
  • Online banking access: In today’s digital age, having access to online banking is essential. Online banking allows you to check your account balances, transfer funds, pay bills, and more from the comfort of your home or office. Make sure the bank you choose offers a user-friendly online banking platform that meets your needs.
  • Bad customer service: Poor customer service can be frustrating and time-consuming, especially if you’re dealing with a bank. Common issues with customer service include long wait times, unresponsive agents, and complicated resolution processes. If you’re unhappy with your current bank’s customer service, consider switching to a bank with better customer support.
  • Life changes: Your financial needs may change over time due to various life events such as getting married, having children, or retiring. If your current bank doesn’t offer the products and services you need for these life changes, it may be time to switch to a bank that can better meet your evolving financial needs.
  • Better perks: Banks often offer perks to attract and retain customers, such as cashback rewards, discounts on certain products or services, or travel rewards. If your current bank doesn’t offer the perks you want, consider switching to a bank that does.
  • Inadequate products or services: If you’re not happy with the products and services your current bank offers, it may be time to switch. Look for a bank that offers products and services that meet your specific financial needs, such as investment options, home loans, or credit cards.
  • Misalignment of values: If you’re someone who cares about environmental, social, or ethical issues, you may want to switch to a bank that shares your values. Many banks offer products and services that align with specific causes, such as environmentally friendly investments or charitable giving programs.
  • Inconvenient branches: If you frequently need to visit a physical bank branch and your current bank doesn’t have convenient branch locations or hours, it may be time to switch to a bank with better branch accessibility.

Switching banks can seem overwhelming, but if you’re not happy with your current bank, it’s worth considering. Look for a bank or credit union that aligns with your values and offers the products, services, and perks you need to manage your finances effectively.

1. Find a New Bank

When it comes to finding a new bank, there are a few factors to consider. Here are some things to keep in mind:

  • Types of banks to consider: There are several types of banks to consider, including traditional banks, online-only banks, and credit unions. Traditional banks typically have physical branches, while online-only banks offer convenience and often have fewer fees. Credit unions are member-owned financial institutions that often offer better interest rates and lower fees. Here’s a list of credit unions that anyone can join.
  • Features to look for when comparing banks: When comparing banks, consider the features that matter most to you. This might include things like interest rates, fees, online banking options, customer service, and mobile app capabilities. Make a list of the features that are important to you so you can easily compare your options.
  • Minimum balance requirements and opening deposits: Some banks require a minimum balance to open a checking or savings account or to avoid fees. Make sure to look for a bank that has a minimum balance requirement that you can comfortably meet. You’ll also want to consider the opening deposit amount, as some banks require a larger initial deposit than others. Other banks don’t require an opening deposit at all.
  • Bonuses for opening new accounts: Many banks offer bonuses or other incentives for opening a new account. These might include cashback rewards, waived fees, or higher interest rates. Be sure to check for any current promotions before opening a new account.

2. Make a List of All Your Automatic Payments and Direct Deposits

As you switch banks, it’s essential to take note of all your automated deposits and payments. Doing this can make the transition run more smoothly and prevent any missed payments or deposits. Here are some things to keep in mind:

Switching Automatic Transactions

Automatic transactions can include things like direct deposits, bill payments, and subscriptions. Don’t forget to switch these over to your new bank account to avoid any missed payments or disruptions in service. Make sure to allow yourself enough time to make these changes before closing your old account.

Here’s what to look for:

  • Direct deposits: This might include your paycheck, Social Security benefits, or other recurring deposits to your checking or savings accounts.
  • Bill payments: This includes your rent, mortgage, utilities, and other monthly bills that typically come out of your checking account.
  • Subscription services: This could be things like Netflix, Spotify, or other monthly subscriptions that are automatically charged to your debit card.
  • Other recurring transfers: These may include things like automatic savings contributions or investment contributions.

Online Accounts Linked to Bank Accounts

If you use online services such as PayPal or Venmo that are connected to your old bank account, it’s important to go in and update those, too. This way, all future transactions will be processed through your new bank account instead of the old one.

Download Your Bank Statements

It might be a good idea to download or print your previous bank statements to be prepared in case any problems related to past transactions arise after you close your account. By doing so, you will have the statements readily available and won’t have to reach out to your former bank for them.

3. Open a New Bank Account

Opening a new bank account can be a simple process, but you’ll need to have all the necessary information and documents before you get started. Follow these steps:

  • Gather necessary information: When opening a new account, you’ll be required to provide personal information, including your full name, date of birth, and Social Security number. However, some banks don’t require a Social Security number. Additionally, banks may ask for proof of your address, such as a utility bill or lease agreement. Be sure to have all this information ready to streamline the process.
  • Choose your account type: Banks offer several account types, including checking and savings accounts, as well as money market accounts and CDs. Consider your financial needs and select the account type that best suits your circumstances.
  • Fund your new account: Most banks require an opening deposit, so have the funds ready to go. You can fund your new account through a transfer from another account, a cash deposit, or a check. Keep in mind that the amount of the opening deposit may differ depending on the bank and account type you choose.
  • Verify your deposit information: Once you’ve funded your new account, the bank may need to verify your deposit information to prevent fraudulent activity. This may involve confirming the source of the funds or verifying that the check you deposited has cleared. Stay patient throughout this process as it is in place to protect your account and personal information.

4. Register for Online and Mobile Banking

After opening a new bank account, you’ll certainly want to take advantage of the free online and mobile banking services that most banks offer. Here you can check your balance in seconds, view past transactions with ease, transfer money quickly, and pay any bills – all from the comfort of your own home or on-the-go. Enrolling only requires a few simple steps.

Also, don’t forget to update any accounts linked to your old bank account; from subscriptions to ecommerce outlets that have stored your payment information – make sure to switch over all those details so that everything stays current and up-to-date.

5. Close Your Old Bank Account

Once you’ve opened a new bank account and set up automatic payments and deposits, it’s time to close your old account. Here are the steps to follow:

  • Transfer remaining funds: Make sure to transfer all the money from your old account to your new account. You can do this electronically or by writing a check to yourself and depositing it in the new account. Keep in mind that some banks may charge a fee for closing an account with a low balance.
  • Cancel checks, alerts, and notifications: Be sure to cancel any outstanding checks and any automatic payments or deposits that are still linked to your old account. This includes things like rent, subscriptions, and utilities. Also, cancel any alerts or notifications you may have set up on your old account.

It’s best to wait until all your recurring transfers have been switched to your new account before closing your old account. This will help ensure a smooth transition and prevent any missed payments or overdrafts. Once all the transactions have been transferred, you can officially close your old account. Make sure to check with your old bank on any requirements or fees for closing the account.

Bottom Line

Switching banks may seem like a daunting task, but it can ultimately benefit your finances in the long run. It’s important to ensure a smooth transition by confirming the switch, updating online accounts and payment methods, and monitoring the process.

A smooth transition to a new bank can lead to improved financial management, lower fees, better customer service, and more convenient features. Keep in mind the importance of finding a bank that aligns with your financial goals and values. By following these steps and considering the factors discussed, you can make a smart decision when switching bank accounts and ensure a successful transition.

Frequently Asked Questions

Is it difficult to switch banks?

Switching banks may require a bit of work, but it doesn’t have to be overly challenging. With the right prep-work in place, the transition can be fairly seamless. Take time to analyze your financial goals, choose a new bank that meets them, and have a plan for transferring any active recurring payments.

Here are some of the easiest bank accounts to open online.

How do I choose the right bank?

When choosing a bank, consider factors such as fees, minimum balance requirements, online access and mobile banking features, customer service, and product and service offerings. A bank should also align with your values and your financial goals.

What are the things to consider when comparing banks?

When comparing banks, consider factors such as fees, minimum balance requirements, online access and mobile banking features, customer service, and product and service offerings. Additionally, you should consider any potential bonuses for opening new accounts.

How can I avoid fees when switching banks?

To avoid fees when switching banks, research and choose a new bank with lower fees or fee waivers, negotiate with your current bank to waive fees, and ensure that you have met any minimum balance requirements to avoid fees.

How do I sign up for a new bank account online?

Visiting the bank’s website is the first step in signing up for a new online account. Simply follow the prompts to get started. You’ll need to provide personal information, identification, and funding details to complete your registration. This will ensure your new account is secure and ready for use.

How can I find out about bonuses for opening new accounts?

To find out about bonuses for opening new accounts, research and compare banks to see what promotions they may be offering. You can also check with the bank directly or search for promotional codes online.

How do I switch my automatic bill payments?

To switch your automatic bill payments, make a list of all of your automatic transactions and contact each company to update your payment method with your new bank account information.

How do I switch my direct deposits?

To switch your direct deposits, contact your employer or the institution that sends your direct deposit to update your account information with your new bank account.

How do I transfer my remaining funds to the new account?

To transfer your remaining funds to the new account, use your bank’s transfer tools or withdraw the funds in cash and deposit them into your new account.

What happens if I forget to cancel an automatic payment?

If you forget to cancel an automatic payment, it is possible that the transaction may still be processed and as a result, you could incur a fee. So, be sure to thoroughly inspect each of your automated transactions to guarantee they have been adjusted with your updated banking information.

How long does it take to switch banks?

The time it takes to switch banks can vary depending on the banks involved and the types of transactions you have. Generally, it is best to allow at least two weeks for the process to be completed.

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