There are dozens of reasons why someone may find themselves at their wits’ end with their bank, and wanting to leave their current institution for another. Customer service is a big one: Dialing into a vast call center and pressing “one” eight-hundred times or screaming “No!” and “Representative!” into the receiving end of your iPhone is probably low on your list of things you want to accomplish today, especially if, once you get to speak with a human being (and that’s a maybe), you find out you’ve been dialing the wrong department the whole time. As if that’s not enough of a mood-killer, high fees, the absence of free ATMs, and a lack of digital features might be other reasons why your current bank is getting on your last nerve.
In recent years, the rise of digital banks has given more freedom and variety to how people choose to manage their finances, and it looks like these brands are giving traditional banks a run for their money (pun intended). Increasingly, people are realizing they don’t have to stick with their bank because there is no other option.
Whether you’re looking to move from one brick-and-mortar branch to another or you’re moving further into the digital era, changing banks is a seemingly daunting task. How do you even start? It’s actually not as bad as you might think. Here’s a checklist to get it done the right way so you don’t end up with any loose ends.
1. Open the new account
Go to a branch, website, or app for the new bank that you’re looking to join. Fill out the necessary fields and forms and get signed up! Check the fees, interest, and policies before officially committing to a new bank to make sure that you’re satisfied with what they offer. Then, make a deposit into the new account. Experts advise not transferring everything you have into the new account, but rather enough for a month’s expenses, in order to make sure the account is up and running.
2. Make sure all your automatic payments and deposits are moved over
Transfer all of your automatic payments to the new account. You are going to want to do a thorough search and make sure things like mortgage payments, water bills, gym memberships, credit card payments, and subscriptions (think Netflix) are accounted for. You are also going to want to make sure all of your direct deposits are pointing to the new account and that all checks you have sent out have cleared.
3. Check through more than just a month of bank statements
It’s key to go through more than just a month of old statements to make sure that you’ve moved everything over. You could miss things like insurance payments, health care expenses or membership fees that you might not pay every month.
4. Talk to your old bank
Ask your old bank about any potential fees you might run into when closing your account. Let them know about your intention to switch, as well and find out about hoops you will have to jump through to actually close the account. Banks don’t want to make this easy for you, remember, so they might require that you send an official letter to close the account or that you submit proof of identification.
5. Ask for a switch kit
A switch kit, which you get from your new bank, can help you close your account and transfer the funds to your new bank. It will also help you transfer any remaining automatic payments and transfers over to your new account in case you’ve missed anything. Most banks offer this, and the easiest way to get one is to call and ask a customer service rep for one.
6. Keep both accounts open for a month or two before transferring all of your money
You don’ t want to prematurely close your original bank account, so keep it open for a month or two before fully making a switch.
7. Close the old account, and ask for confirmation
Before completely shutting down your original account, make sure again that you’re not incurring any extra fees. With that done you are ready to pull the trigger! Remember to ask your old bank for confirmation that your account has been closed so that there is no confusion later on. Get documentation that you can keep as a record.
Thinking of switching banks? Watch our video below that summarizes the process!