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The essence of switching banks is that you’re moving your cash from one account, closing that account, and putting the cash into a new account at another bank.
There are many reasons you might want to switch banks. Some banks offer better customer service or convenience than others. Different savings accounts at different banks may have much higher interest rates. You might even have moral or ethical reasons for switching.
The essence of switching banks is that you’re moving your cash from one account, closing that account, and putting the cash into a new account at another bank. You’ll also have to update your banking information for any automatic payments or withdrawals.
Luckily, switching banks isn’t hard, but there are some steps you have to follow to make sure the process goes seamlessly. Not following these steps could cause a headache for you and anyone you regularly make payments to.
Read on to learn how to switch banks the easy way.
Before you make the switch, you need to open a new checking or savings account (or both) at a different bank or credit union. This can done either in person or online. Make sure you research the best banks and credit unions for your needs as well as the types of accounts you want to park your money in.
Not sure what kind of account you should get? Our partner Fiona can help you compare bank accounts and find the best one for your needs.
You’ll need to provide some information about yourself and anyone who will jointly own the account with you. You’ll also need at least one form of ID.
Some banks require you to make a minimum deposit when you open the account. If that’s the case with your new bank, be sure to withdraw some cash from your old bank to meet the minimum at your new one.
However, don’t withdraw all the cash in your old accounts until your new one has been created. Many banks charge a low-balance fee (sometimes called a “maintenance fee” or “minimum deposit fee”) if your balance falls under a certain amount.
Learn more about what you need to open a bank account.
If you have direct deposit for your paycheck set up, then you’ll have to switch it over to your new bank. Talk to the person in charge of payroll at your company and he or she should be able to do it for you. You may need to provide a voided check just like when you set up direct deposit originally.
(Learn about why direct deposit it’s the most secure and convenient way to get paid.)
It may take at least a few weeks before the direct deposit is active. During that time, your salary or wages will still go to your old account.
We recommend keeping your old bank account open until your direct deposit starts appearing in your new one. Otherwise, the deposit may be rejected and you could face a delay in getting paid.
Once you’ve confirmed that direct deposit is active for your new account, it’s time to close your old account. To do that, you’ll need to meet the following requirements:
Once these have been satisfied, you can transfer your funds over. You can make an electronic transfer to your new bank (Zelle, a payment network that connects banks together, is the easiest way to do this), receive the funds in the form of a check, or withdraw the funds as cash. If you haven’t already hit your minimum balance requirement at your new bank, then deposit the money as soon as possible.
Now you can close your old account. Someone at the branch location can do it for you, or you can call the bank directly. If you use an online-only bank, you may be able to close the account from the website, but brick-and-mortar banks typically don’t allow this option.
Learn more about how to close a bank account.
Save money and earn interest by opening a new savings account.
Your money can earn money just by sitting in a savings account. Policygenius has partnered with Fiona to get you great interest rates from some of the best online banks.
If you used automatic bank withdrawals to pay your bills, you’ll need to log onto each provider’s website (or speak to one of their representatives on the phone) to update your banking information. Other companies have no way of knowing you switched banks unless you tell them.
Make sure you update your banking information for any recurring charges, which include but are not limited to:
Having a savings account is half of the financial protection battle. Life insurance is the other half.
Your savings account can help you save money, but a life insurance policy will keep protecting your family when you're no longer around.
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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