Can You Switch Banks? Follow These Steps

Switching financial institutions is a common process for many individuals. People often change banks for improved services, lower fees, or a more convenient location. Understanding the steps involved can make the transition manageable.

Preparing for Your Bank Switch

Before initiating any transfers, compile a thorough inventory of all financial activities linked to your current bank account. Review bank statements from the past six to twelve months to identify all transactions and recurring financial movements.

Create a detailed list of all direct deposits, including sources such as employer payroll, government benefits, or investment dividends. For each deposit, note the payer, amount, and frequency. Itemize all automatic withdrawals and payments, such as bills, mortgage payments, credit card bills, and subscriptions. For each, record the payee, amount, due date, and payment method. Also, list any scheduled transfers and outstanding checks.

Once this financial overview is complete, open your new bank account. This involves establishing the account, receiving a new debit card, and setting up online banking access. Fund the new account with an initial deposit to ensure it is operational before proceeding.

Steps to Complete Your Bank Switch

With your new account established and your financial inventory complete, the next phase involves systematically moving your financial activities. Begin by transferring the majority of your funds from the old bank account to your newly opened one. It is often recommended to leave a small buffer amount, perhaps enough to cover one to two months of typical expenses, in the old account to account for any lingering automatic payments or checks that might clear during the transition period.

Update your direct deposits by notifying all income sources of your new bank account details. This typically involves providing your new routing and account numbers to your employer’s payroll department, government agencies, or pension administrators. Many organizations offer online portals or specific forms for this purpose.

Change your payment information for all automatic payments and subscriptions using your compiled list. This process usually requires logging into each vendor’s website or contacting customer service to update the stored payment method. It is important to update every identified recurring payment, as banks do not automatically transfer these arrangements.

Throughout this transition, continuously monitor transactions in both your old and new accounts. This monitoring period, often spanning one to two billing cycles, helps confirm that all direct deposits are correctly routing to the new account and that all automatic payments are successfully debited from it. Vigilant monitoring helps identify any missed payments or unexpected activity from the old account.

Finalizing Your Account Closure

After successfully transitioning all direct deposits and automatic payments to your new account, and confirming that no outstanding checks or debits remain, you can proceed with formally closing the old bank account. Review the old account’s statements one last time to ensure all transactions have cleared and the account balance is zero. If a small balance remains, transfer it to your new account before requesting closure.

Contact your old bank to formally request the account closure. This can often be done in person at a branch, through a written request, or sometimes via online banking features, depending on the bank’s specific policies.

Request written confirmation of the account closure from the bank for your records. This documentation serves as proof that the account has been successfully closed. Securely destroy any old debit cards, unused checks, and credit cards solely linked to the closed account by cutting through the magnetic stripe, chip, and account numbers, or by using a cross-cut shredder.