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There are lots of reasons why you might find yourself wanting to bank with a new financial institution. Maybe you want different benefits or a higher interest rate on your funds. Maybe you’re looking for a better customer service experience after one too many hiccups or unhelpful 1-800 calls.
Regardless, when it comes time to make a change, the process of switching banks can feel intimidating. Rely on these basic steps to help you make a sound choice and protect your information along the way.
1. Decide Where to Bank
One of the most important steps when updating your money management is deciding who you want your new banking partner to be. In order to make this choice, determine what you’re looking for from a new account or bank overall:
- Interest Rates – Are you looking to earn more on your balance? Compare your current account’s interest rate to what a new bank can offer.
- Account Fees – If you’re frustrated by fees, consider what type of bank account might waive fees or include overdraft services.
- Tools & Features – Mobile banking is becoming a modern necessity. Think about how often you transfer funds between accounts, use mobile deposit, preview changes to your budget, or want to calculate a payoff date.
- Future Needs – You may not need a loan or mortgage now, but will you in the next few years? Consider a banking partner that offers the kinds of products you’ll want now and later.
- Customer Support – When you have questions or problems, a friendly face and a non-judgmental conversation are worth their weight in gold. See what a bank’s current customers have to say about their experience by checking out their online reviews or talking to someone you know who banks there.
- Location – Having a branch of your bank nearby is always helpful, but be sure to research what ATM locations you’ll be able to access as well.
Once you determine your priorities, let them guide you in choosing a banking partner. And remember, if you’re unsure about what a bank has to offer – ask them!
Learn More: Relocating? Here’s How to Choose a New Bank
2. Open a New Account
When you’re ready to take a new bank up on their offer to switch, it’s time to open an account with them!
Depending on the type of account you’re after, you may have different options for how to set it up: in a branch or online. However, the steps you take to complete your account opening process are similar for both.
First, you’ll need to provide identification and documentation required by the financial institution. Often, this includes proof of your residential address (not a post office box) as well as one or more forms of ID and social security number. Banks require this in order to combat fraud and help ensure the account is being used for its intended purpose.
Next, you’ll be asked to fund the account. This initial deposit can be anything over the minimum account opening threshold. For instance, at SouthEast Bank, checking accounts have a $50 minimum deposit to open. You can make this deposit using cash, a check, or pulling from another bank account.
Your institution will then provide you with further information about linked debit cards (if applicable), online and/or mobile banking, and other account-related resources.
3. Switch Automatic Payments & Deposits
One of the biggest challenges people anticipate when it comes to switching banks or bank accounts is this: updating all of the other platforms your information is linked to.
Chances are, when you began working for your employer, you filled out a form either on paper or using a digital platform to set up direct deposit. This is often a preferable way for employers to disburse paychecks, rather than cutting paper checks that then have to be deposited by employees. The good news is that updating this information to go into your new account is often an easier process than it seems, and your employer will likely have resources or support staff to help you make the change. Just be sure to keep the routing and account number for your new account secure throughout this process.
Do you have monthly bills or other recurring payments set up to pay from your past account? Take note of what bills are set to automatic payment and make updates accordingly. The sooner you do this, the less chance there is of paying a bill from an old account and potentially be penalized for non-payment.
What else do you currently use your account for? Have you added it to your digital wallet or to platforms like Venmo or Paypal? Updating these once can help you save time down the line, rather than manually entering your account or debit card information for each transaction when available.
These steps may feel tedious, but once they’re complete you’ll be past the biggest hurdle of switching banks.
Are You Keeping an Account with Both Banks?
If so, your work is done! If not, follow these next two steps:
4. Transfer Your Balance
If you no longer need your old account, you can now transfer the funds in it into your new account(s) accordingly.
Depending on the type of account and the amount of funds to transfer, there are a number of different ways to take this step, including:
- Making a bank-to-bank transfer
- Setting up a wire transfer
- Writing yourself a check
- Withdrawing as cash or cashier’s check
We recommend consulting your new bank about what may be the best choice in your case, including potential fees.
Before closing any bank account, particularly a checking account, it can be smart to allow an ample window of time and funds to offset any pending transactions or fees that may occur. Be sure to monitor your account, but typically a month should suffice for this purpose.
5. Close Out Old Accounts
After all of the preceding steps are complete, the final one is to close any accounts you will no longer be using. Most banks will require you to close your account, so you may wish to wait and complete step four, transferring funds, during this appointment, since the remaining funds in your account will be issued to you upon closing.
After you’ve received your final statement, shred any checkbooks, debit cards or credit cards, or anything else linked to the closed account to help keep your information secure.
Final Considerations
Depending on what type and how many accounts you have, we understand the process of switching banks can feel arduous, but here’s one more bonus step: enjoy your new bank account! You’ve done the hard work of identifying your needs and preferences and updating your money management accordingly. Now, maximize all that your new bank and account have to offer: enroll in online banking, download your bank’s app, and take any additional steps recommended by your banker. For instance, to earn the highest rate on your Bonus Rate Checking account with SouthEast Bank, one required step would be to enroll in eStatements.
Your new bank is always available to help answer questions or concerns you may have about your account or any future needs you might have, so don’t be hesitant about accessing their resources or support!
Learn More: What Is a Community Bank?
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