Money Smarts Blog
Switching Your Bank May Be Easier Than You Think
Aug 1, 2019 || Kelly Hendershot
Maybe it’s time for me to move my checking account? It may begin as a fleeting thought when your financial institution’s customer service representative was rude to you, again, as you withdrew funds. More time goes by, and
the thought returns. This time you just received notification that your monthly maintenance fee will be increasing.
But you didn’t because life got busy. And it really isn’t that big of an increase. You were looking for a good reason to stop your daily coffee run anyway.
Justifying the Move
In all honesty, there are many times where it may be appropriate (smart even) to make a financial switch:
- You’re moving out of state to start college in the fall and want to get a jump on “adulting.”
- You just got engaged and wedding budgeting would be so much simpler if your accounts were at the same financial institution.
- You just got divorced and you want your money as far away as possible from your ex.
- Or you’re just not happy with your current financial institution and wonder if the grass is really greener on the other side.
Go ahead, take a minute and think of your own personal reasons, if not already listed above, for why it would be smart to move your checking account.
Now, what’s the biggest reason you don’t take action?
- It’s time consuming.
- You don’t know where to start.
- It’s going to be a huge chore.
- You’ve been at your financial institution since birth, it would just be wrong to move.
With the exception of unfounded loyalty for an institution that was chosen for you and not by you, the rest of your barriers can be removed with just a bit of planning.
Simplifying the Move
- Do Your Homework. You may already have a new financial institution in mind. If so, that’s great. Feel free to skip to step two. If not, do not blindly go about choosing a new financial institution. Talk to friends and ask them where they bank, what they like about it and what they dislike about it. Compare rate and fee tables at your top choices to narrow things down. Check out online reviews. Physically walk into the lobby of different branches to see how welcomed you feel. Not a people person? Check out the online banking sites or apps instead.
- Open Your New Account . Often times this can be done online in 10 minutes or less with a nominal starting deposit. Give yourself time to get acquainted with your new home before closing your old account though. You’ll want at least a couple of weeks to transfer automatic withdrawals and to receive your debit card. For convenience, link your old and new accounts to make moving funds easier. But leave a safety net in your old account… for now (just in case you forget about the auto withdrawal by Netflix.)
- Reroute Income and Payments. Now is the perfect time to start making a list of all automatic payments, their amounts and when they debit your account. In addition to your primary employer’s direct deposit, you may have
other sources of income to consider moving. These could include Social Security benefits, pension/annuity income, investment earnings, side hustle credits, etc. As you build your list, begin making arrangements to move the debit source to your
new account. Some common automatic payments to consider:
- Subscriptions & memberships (Netflix, Dollar Shave Club, the gym, etc.)
- Online shopping (Amazon, Etsy, any place you’ve saved your debit card info)
- Bills (Water, cable, cell phone)
- Store debit cards (that 5% back from Target is great. Just make sure you update them with your new checking account info)
- Online donations (religious institutions, alumni associations, charity support, etc.)
Pro tip: search through your online banking transactions to find any automatic payments you may have forgotten about.
- Be Patient, We’re Not Quite Ready to Cut the Cord. that well thought out list of automatic payments? You’ve probably still missed something. It’s okay, that’s why we’ve included this buffer and suggested you keep that safety net. This waiting period will help you avoid any late fees for payments you forgot to transfer. Let’s avoid that.
- Okay, Close That Old Account. Congratulations! Step three has proven successful and you can finally say goodbye to your old account. Withdraw remaining funds in cash or via cashier’s check. In most cases you can close the account by sending a letter to your old financial institution.
Now, was that so hard?