A lot of people are making the switch from the type of financial institution they use and are leaving big, commercial banks behind because of high fees and poor customer service.
No matter your motivation, making the decision to switch your bank account can be intimidating and overwhelming, as well as leave you lots of questions. Will switching effect your credit? Are you going to lose the perceived security of a big bank, or the convenience of having branches and ATMs on almost every corner? Not to mention that you might worry about forgetting your rent is due and bouncing a check from your old account while you're in the process of transferring money.
Sometimes, the only thing that keeps us from taking action is knowing how to make the change.
The good news is that switching banks can be a lot easier and less time consuming when you know what you're doing (or you have someone to help you). Sometimes, the only thing that keeps us from taking action is knowing how to make the change. Don't let fear keep you from switching bank accounts to one that actually meets your needs.
We're here to help you. Use this guide to make sure you've covered everything you need to switch.
To make switching bank accounts as easy as possible, there are a few things you need to do before the actual switch to set yourself up for success.
The biggest part of switching banks is finding the financial institution you're going to switch to! This can take some time, and you want to do your research so that you don't go through this process only to find out that you want to switch again. Most often, you'll be choosing between a bank (whether its a national bank or a smaller local bank) and a credit union.
Credit unions are usually more community based and may serve certain populations based on their location, employers, schools, or other criteria. Unlike banks, credit unions are also not for profit cooperatives that are owned by their members.
At the end of the day, it's up to you to select a financial institution that offers the things that are most important to you. Switching to a smaller bank or credit union may mean sacrificing the option of having a branch near you no matter where you go in the world, but with today's technology, like online and mobile banking, you can manage your money anytime, anywhere without needing to visit a branch.
Additionally, most financial institutions these days are part of nation-wide ATM networks, such as All Point and Money Pass, that allow you to access your funds from any ATM across the country. So even if you're traveling, affordably accessing your funds shouldn't be an issue with a smaller financial institution.
Plus, smaller banks and credit unions usually have lower fees, higher rates of returns on certain accounts, and lower loan rates. You'll also get more personalized customer service and a family-feel from switching to a smaller, local institution.
With all of the automated features and services that financial institutions provide, there are a lot of moving parts that you will need to get in order. Make sure you check this list of things to do before you change banks:
Once you've selected your new credit union or bank and have your documents in order, it's time to get to work.
Once you've selected your new credit union or bank, and take some time to get organized, the next step to switching banks is to open a new bank account at your new financial institution. You will have a variety of account types and services to choose from, and while they may be called different things at different institutions, these are the essentials:
Before you pick the account type or products you need, make sure you understand the requirements and minimums for each. Knowing the requirements for minimum balances or planning for monthly fees will set you up for success with your new account.
It's also important to be aware of how to make deposits at your new credit union or bank, especially while you're transferring your money from your existing account and your new one – can you use PayPal, physical checks/digital check deposits, or do they work directly with your existing financial institution?
When you're ready, opening a new account is pretty straight-forward and can usually be completed with an online application. This step is crucial, as the sooner you get your new bank account set up, the better. You can’t switch banks if you don't have an account to switch to.
Once you open your new account, you'll receive all the account information associated with the account, as well as a debit card if you opened a checking account.
Once you've made it through the other steps and have run your accounts in tandem for a couple months to make sure everything is in order, it's time to officially say goodbye to your old account.
Knowing how to close an old bank account may seem easy but you need to handle the process carefully to make sure you don't miss anything.
Let one of our financial experts walk you through the the process of switching bank accounts and make sure the process is as smooth as possible.
We're here to help you. No judgement. Just guidance.