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Switching Banks is Easy!

Written by: Sara Coulter |

 It's easier than it sounds, and we'll be right there with you the whole way.

So, you’ve come to the decision that you're switching banks – or at least that’s the plan.  When reality hits, you either come up with every excuse to avoid the pain, or you simply don’t know where to start. 

Most people ask themselves at this point, "Exactly how DO I switch banks?"Switching from one bank to another should be neither confusing nor painful.  It just takes a little planning, and you’ll be in your shiny new account in no time.  Here’s how.

1. Switching - The Plan

This step will make everything else easier, and you won’t run the risk of forgetting something.  Think about everything that is linked to your current bank account.

  • Direct deposits – payroll, social security, unemployment, etc.
  • Automatic bill payments – either through your bank account or a credit card or another bank account.  Don’t forget payments like your monthly Netflix subscription, your annual Amazon Prime dues, charity donations, etc.  Separate the payments by those through your current bank (bill pay service) and those paid with a credit card or another account.
  • Recurring transfers – Do you transfer money every week to your son at college?
  • Linked accounts – There’s that son at college again.  Or maybe you have your current bank account associated with a credit card or an account with another financial institution.
  • Banking alerts – You’ll want to cancel these and set up similar alerts at your new bank.
  • Smartphone apps – mobile banking.
  • Text alerts – See Banking Alerts.

If you’re not sure whether you remembered everything, look through your current bank statements for one year (to catch those annual payments, etc.).  And to help with the rest of the switching process, download our Switch Kit Pre-Transfer Worksheet.

2. Start the “weaning” process.

  • Calculate how much you need in your current account to cover outstanding checks, pending debit card charges, and any bills which may drop during the transfer.  You may also wish to leave a small cushion for anything you forgot, and keep an eye on your minimum balance, if your account penalized you for dipping below.
  • Stop using your debit card and/or writing checks.  You’ll need to withdraw enough cash to live on a few days during the transition (once your new account is set up) and to cover your first deposit into the new account.  Keep an eye on your old account to make sure all payments clear, which should take about 3 days.

For the time being, leave your direct deposit, Paypal account, and other online payment systems tied to your bank account.

3. Open your new account, and set up auto transactions.

By now, you will have chosen a new bank, and it’s time to open your new account.   Don’t forget about online banking and mobile banking.  Your customer service rep can help you register and explain how to use both, if you are new to these services.

Once the account is open and you have an account number, it’s time to set up all of your automatic transactions and online banking information.

  • Direct Deposit. See your employer for a form to change your direct deposit information.  This usually can be done by the next pay cycle, but make sure to ask how long it will take to process.
  • Automatic Payments. Go back to your original list that you made when you started the process.  You can now set up your online payments through your new bank, and change the account information for payments automatically debited by other companies.
  • Online banking/mobile banking alerts.  Your new bank will have alerts that you can set up to notify you when an event happens with your account.  You can also download the mobile banking app.
  • Order checks.  If you use paper checks, order them now.
  • Paypal. Finally, switch your banking information in any online payment systems you have set up.

4. Transfer your money to your new account.

You’re almost finished!  Your new bank can help you with step.

5. Close Your Old Account

Take one last look at your old account and double check that everything has cleared.  If so, you can go into your old bank to close the account.  Confirm ahead of time what documentation or identification they may need.

See!  We told you that switching banks is easy!  Good luck, and enjoy your new bank!

Topics: Wealth, Business, Personal

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