How To Switch Banks – Quickly and Easily
Think about your current bank…
Are they charging you unreasonable or annoying fees?
Is their technology not up to par with what you want?
Do they do a poor job of customer service?
Or maybe you aren’t satisfied with your current interest rates.
If one or more of these issues is always on your mind when you’re doing your banking, then it might be time to switch banks.
Switching banks isn’t all that difficult, but you can’t just snap your fingers and move money to a new bank account if you don’t want to get hit with penalties from your current bank.
In fact, it might take you a few days depending on your schedule.
But to cut down the time it takes, we’ve laid out a step-by-step process below on how to successfully switch banks, so keep reading!
Step 1: Find Your New Bank
First of all, you’re going to need to shop around.
There are tons of banking options.
You could move to a traditional bank, an online bank, or even a credit union.
Whichever you’re thinking about, make sure to budget plenty of time for shopping around as there are a lot of characteristics to consider when picking a new bank.
Here are a few characteristics you should look for when you’re in the market for a new bank.
Types Of Accounts
The most important feature to consider is the product/account offerings.
Every bank has savings and checking accounts, but they could also have special versions of those accounts with different terms and interest rates.
There’re also products like CDs and money market accounts, so look for those if you want additional bank investments.
Another important factor is the existence of branches. Some people like the flexibility and general customer experience of online banks, but many still prefer traditional branches.
If you prefer the brick-and-mortar route, you’ll also have to consider the amount of branches. Banks like Chase are all over the place, making banking access easy even if you’re traveling.
Some smaller banks could be worth sacrificing a million branches, though. It’s up to you.
Banks love to line their pockets through various fees. Many people switch banks mostly in part due to losing a noticeable amount of money to bank fees.
Obviously, you’ll want a bank that charges the lowest number and amounts of fees possible without sacrificing in other areas.
A bank with amazing accounts and little fees isn’t all that great if you can’t get you questions answered promptly.
Some banks unfortunately make you jump through hoops like robo-customer service agents that can’t always provide that human touch.
If human nuance is important to you, make sure to check customer service reviews of your top banking choices.
Lastly, mobile and online features make for a convenient on-the-go banking experiences. Banks have varying levels of technology available, so look into their website and their mobile app if online/mobile banking is important to you.
Also, check up on their level of security. The last thing you want is someone stealing your money or sensitive information.
Step 2: Transferring Your Current Accounts
Alright, you’ve found your bank and you’re ready to move money over.
There are a few steps required to do this successfully.
First, Open Your New Accounts
You’ll want to open both a checking and a savings account, as only having one or the other is a huge financial mistake.
When you open them, the first thing you should do is link them with your old accounts. Link the new accounts to each other too. That way, you’ll be ready for the next step.
However, you should also set up direct deposits with your new accounts for all sources of income and cancel the old direct deposits
Then, Transfer Most Of Your Money
With your new accounts open, it’s time to move most of your money over from your old accounts.
You don’t want to transfer it all at once because you old bank could hit you with minimum balance fees. In addition, you should figure out if any bills will hit your old accounts. Leave enough money to cover those plus a little extra just in case.
Try to time your transfer when you won’t have any automatic bills coming up to avoid overdrawing your old account, though, just to be safe.
And once you’ve moved your money, keep both accounts running for about a month to make sure there are no oversights.
As for actually moving the money…
You have a few options for transferring your money. The cheapest option is carrying cash from one bank to another, but it’s not safe to carry your life’s savings on you.
Wiring money is an instant, safe method of transferring money. However, you have to pay a decent chunk of change to make a wire transfer.
Electronic transfers and certified checks are your cheapest safe options, but it takes a few days for them to process.
Step 3: Set Up Automatic Bill Pay
Now that most of your money is in your new accounts, you’ll want to update your automatic payments for every bill.
This can be a tedious process, but you need to set up all your automatic bill pays as soon as possible to avoid overdrawing your old accounts.
Some people might think you can do this after closing their old accounts, but that’s risky. All the services you pay bills for will try to draw money from a closed account if you aren’t quick enough. That obviously won’t work.
They may be kind enough to let you know you need to give them your new bank information, but that doesn’t change the fact that you might be inconvenienced with late fees or cancellations on whatever bills you pay.
Step 4: Close Your Old Accounts
After you’ve moved your money over and set up all your bills with your new accounts, it’s finally time to say goodbye to the old bank accounts.
Unfortunately, you can’t just assume your account is closed as sometimes banks will reopen your account without informing you.
“Wait. They can do that?”
Yes, and this phenomenon actually has a name: Zombie accounts.
One way these accounts can “come back from the dead” is if a check goes to your presumed “dead” account. Banks like to take advantage of this by reopening the account and hitting you with fees.
Before you know it, you’re getting stern calls from your old bank saying you owe overdraft or late fees that you weren’t aware of.
So how do you avoid this nefarious banking practice?
Simple: get documentation. Don’t assume your old account is closed for good until you have official documentation saying so.
Welcome To Your New Bank
When you have your documentation regarding closure of your old accounts, congratulations! You’ve officially switched banks.
Enjoy your new financial institution.
But if they ever start charging you fees, failing at customer service, or engaging in any other frustrating practices…
At least you’ll know how to jump ship.
And if you can’t remember, you can always reread this article!
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