Although having a bank account might make managing money easier, there are times when switching banks may be required or beneficial. If you relocate to a new city, you might need to transfer your funds to a new bank.
Is it difficult to change banks? No, not always. Whatever your reason for creating a new bank account and closing your old one, you must take a few steps to ensure a smooth transfer.
You can closed your old account once you’ve confirmed that all direct deposits and billing methods have been changed to your new account.
Open an account at your new bank
Find a new bank account that you would like to use. You might pick one that
- has a great mobile phone app,
- provides top-notch customer support,
- gives competitive interest rates on deposits and savings,
- offers additional benefits like free checks or doesn’t charge account fees.
Several local banks and several online banks provide free checking. Several others ask you to keep a particular amount or make direct deposits to avoid fees. Make sure you can comply with any rules your bank sets if you want to avoid paying fees.
Once you’ve chosen the best bank, complete the paperwork to start an account. Most banks let you do the entire process online. Your social security number must be provided, and you may be asked specific questions to verify your identity.
Keep track of all automatic and direct deposits.
Your check, dividends, and other revenue sources might all be paid automatically into your bank account. Monthly automated payments may also be made for utilities, subscriptions, loan repayments, charitable donations, and other services and goods in addition to telephone and utility bills.
To avoid difficulties, keep a list of these incoming and outgoing transactions over the previous 12 months; you’ll need to move these to your new account once it’s set up.
Be sure to keep note of any automated transactions that happen regularly, semiannually, or yearly. Also, take note of any linked accounts, such as money recurringly moved to a health savings account or an individual retirement account.
Transfer your direct deposits and payments
It’s time to move all the automatic transactions—payments and deposits—from your old account to the new one after you’ve finished accounting for them. Updating your payroll deposit information is typically done online through the payroll provider’s website, but human resources can also assist you in transferring direct deposits to the new account.
Keep in mind any one-time or ongoing transfers from one bank or credit union account to another, such as from a checking account to a savings or retirement account. The two accounts you use for transfers must be linked, which may be possible via the institution’s mobile app or website.
Fund your new account
You must deposit funds when you change banks and open a new account. Most banks offer several alternative options for doing this.
You might submit a check, deposit the funds at a nearby branch or ATM, or have the money automatically transferred from your former bank account. Make sure neither your old bank nor your new one charges you fees if you move money automatically.
Order checks for your new account
Checks can be obtained free from some banks and for a fee from others. If your bank charges for checks, shop for the best checkbook value. When you change banks, you can order the checks from anywhere. Just provide your routing number and account number.
Even if you don’t use checks frequently, having at least one checkbook is a good idea. You never know when you’ll need a check to pay vendors of services who don’t accept payments online. Additionally, since checks never expire, you can store them in your home forever.
Close your old account
It’s time to close your old account once you’re certain that direct deposits are being made to your new account and you’ve changed your bill payment method. To avoid being charged for inactivity, make sure the account is closed. Open accounts that are not used may also be subject to fraud.
Although many banks allow you to close your account online, some may require you to visit the local branch. You can get the money as a check if any funds are left in your former account. You might also use an electronic transfer to put the money in your new account.
If you do not specify how you want to receive any pending interest payments, you may not receive them for several months after closing your account.
Key Points
- Before changing banks, you must consider your current banking requirements and whether your current bank can provide them.
- After deciding that moving banks is the best course for you, it’s crucial to investigate new potential banks to choose one that suits your needs.
- The subsequent phase is to open a new account once you have identified a bank that matches your requirements. It could be necessary to do this in person, but creating an account online is also feasible.
- When you switch banks, one of the most important things to do is ensure that all of your direct deposits and automatic payments are sent to your new account. For example, you can start by changing your VA Direct Deposit information
- Close your old account once your automatic transfers and direct deposits have been sent to your new one. This will keep your transactions from getting mixed up or happening more than once.
