According to a recent survey by Consumers Union, more than half of those who wanted to change banks gave up before completing the process. Top reasons for failing to make the switch included the trouble of changing automatic payments and deposits along with the amount of time and effort the change would take.
While it’s true that switching banks will take a bit of work, the savings and improved banking experience can be worth the trouble.
Here are six steps to make switching banks easier.
1. Research banking options
You might already be frustrated with your current bank, which is why you’re looking to make a change. But before you making the move, be sure to evaluate the other options. Changing banks is a bit of a hassle, and you don’t want to repeat the entire process when you find out you don’t like your new bank, either.
There’s a wide spectrum of banking options available with a range of features. Some considerations include:
- Type of bank. There are large, national banks; medium, regional banks; local banks and credit unions; and online-only banks. Each offers a wide range of features, locations, and customer service options.
- Fees. Fees likely play a huge part in changing banks. Does your new bank charge fees just for keeping an account? Fee schedules are more complicated than they used to be, so check the fine print.
- Rewards. Some banks offer cash-back debit cards, which can net you a few bucks just for making regular purchases. Others offer bonuses for opening new accounts that might provide a little extra incentive to make the change.
2. Open the new account
Once you’ve chosen your bank, go in (or go online) to open an account. This step usually involves just a little time and a few documents.
In addition to an ATM card, make sure to order checks whether you’ll use them or not as this will make setting up direct deposit easier.
3. Start using your new bank account
Once you get a new bank account, start using it as soon as possible. Make new deposits into your account and make all payments from there, too.
Making the change takes time, and a gradual transition often makes the most sense. The sooner you start, the sooner you can close out the old account and stop paying fees.
4. Switch direct deposit and bill payments
Arguably the biggest pain of this entire process, you’ll typically have to go to each place that handles direct deposit and have them changed. This means a whole new round of voided checks to file and forms to fill out with employers.
For bill payments, the easiest way is just to look back at the last month or two of your bank statements on your old account to see what accounts are linked. Things like credit card, cell phone, cable bills, and utilities should be easy to spot and can often be updated on the respective websites in just a few minutes.
While you might be anxious to close your old account right away, don’t do it too soon or you may run into trouble.
When I changed banks, I thought I had everything moved over. Then an unexpected direct deposit went to my old account a few weeks later, causing the account to be reopened. Oops! Because of this, I had to make another trip to the bank and hand over documents to close my account for a second time.
Luckily I wasn’t hit with any fees, but mistakes like this will cost you money if you bounce a check or have insufficient funds for a transfer. Keep your account open for a least a month to overlap with the new one to avoid these situations.
6. Close your old account
Closing your old bank account isn’t so hard, assuming you’ve followed all the previous steps.
You can actually close your bank account without even setting foot in a branch. Just mail a mail a letter asking for your account to be closed and for any remaining funds in the account be mailed to you.
Going into the bank and sitting down with a branch employee works, too. They may ask why you’re closing your account, and if they do, feel free to be honest. Who knows — your feedback might lead to changes that could bring you back as a customer someday.