If you're unhappy with your bank for any reason — or if you just found a new bank you think is a lot more exciting — you may be interested in switching banks.
While the thought of switching banks may be intimidating, it's a lot easier than most people realize.
Following these six simple steps, you can switch banks with ease. You'll just need to sign up for your new account, update automatic payments and get some bills set up, and you'll be on your way.
Read along to learn more about how to switch banks and tips to make it as easy as possible.
Step 1: Apply for Your New Account
Your first step is to apply for your new account. Getting a new bank account is easy as long as you have the right documents and IDs when you head to the bank. If you want an account at an online bank, it's even easier because you can do it all from home!
To fulfill the bank's KYC (know your customer) requirements, plan to provide your name, address, phone number, Social Security number, proof of address and at least one government-issued photo ID.
Getting a new bank account often involves a credit check and/or a check in ChexSystems, a network that banks use to track bad customers. Assuming all is well, you should get approved instantly. Then it's time to move on to the next step: funding your new account.
Step 2: Make Your First Deposit
To use your account, you'll need some money in there. Some banks require a minimum opening deposit amount, while others let you decide. If you're able, fund your new checking account with at least one month's expenses. That way, you don't overdraft as you move over your automatic expense payments.
For an online bank, you'll generally fund your account with an electronic funds transfer through the automated clearing house (ACH) system. That means you'll need your old bank account number and routing number to connect your accounts.
You can get your new account information from your banker, the bank's website or the bottom of a check. The routing number is a 10-digit number unique to your bank, and the account number is a numerical identifier unique to your account. The combination of routing and account numbers is used to send funds between accounts at banks across the United States.
Alternatively, you could go to your old account and make the transfer from there to the new one. For a physical branch account, you can fund an account with cash or a check.
Step 3: Move Your Direct Deposits to Your New Bank
Once your account is funded, your next step is pointing your paycheck and other direct deposits to your new account. For your paycheck, you may be able to do this through a self-service human resources tool. Or you may need to file a form with your human resources or payroll department.
For other recurring deposits, you'll want to update your account number and routing number to point your deposits to your new bank account.
Step 4: Bring In Your Automatic Payments
Once your automated deposits are set up, you can switch over your automated withdrawals and payments. It's important to fund and set up recurring deposits first. These help ensure you don't accidentally overdraft your new account with an automated payment.
However, be sure to move over automatic expenses right away. After all, you don't want to accidentally overdraft your old account or miss a payment. That mistake can easily cost $50 or more combined!
You'll use the same routing and account number to update your automated payments in most cases. Automated bank payments often include utilities, mortgage or rent, HOA dues and nonprofit donations.
Step 5: Setup Your New Bank's Bill Pay
Now that the automatic recurring bills are all moved to deposit and withdraw from your new bank account, it's time to update the last part of your semi-automated banking: your new bank's bill pay.
I use my bank's bill pay to pay credit cards, my water bill, and a few other bills I can't pay with my credit card for miles or points. Most banks offer bill pay service for free and will send payments electronically or via paper check to any biller you enter.
Before you close your old account, take a screenshot or write down all of your bill pay accounts you want to move to your new bank. If you don't use your bank's bill pay already, it is worth looking into. It could save you time and stamps when sending payments to anyone with a U.S. mailing address.
Step 6: Close Your Old Account
Contrary to a popular myth, keeping an old bank account open does not help you in any way. (This is not the case with credit accounts.) Old accounts serve only as a source of financial clutter and an easy place to accidentally make a mistake and overdraft an account.
Once your credit cards, money apps and all of your recurring payments are updated, you can close that old bank account and focus on the new one.
While bank accounts may not be the most exciting part of your life, switching accounts can be time consuming. It feels great to finish!
Switching banks to a new account at a new bank can do a lot for you. It can help you save money, avoid fees, get a better interest rate, add convenience to your life, give you access to free ATMs and a lot more. Don't ever feel stuck in an account you don't like or with a bank you don't trust.
Moving banks is your right as a customer. You should find the right bank that makes you happy and meets your unique banking needs. That's what choosing the right bank account is all about.