Don't Forget to Do This When Opening a New Checking Account

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KEY POINTS

  • The process of opening a new checking account is relatively simple.
  • You can minimize bill pay errors and avoid paycheck deposit delays by taking proper steps when opening a new bank account.
  • These steps include funding the new account, updating your bill-paying and direct deposit settings, and closing the old account when everything is set up with the new one.

Taking proper steps when opening a new checking account can help you continue to pay your bills on time and avoid extra fees.

You likely already have a checking account, but there may come a time when you decide to open a new one. Whether you're relocating, want to switch banks, or prefer a bank account with more features, you want to take the proper steps to set yourself up for success as you make the switch. Find out what moves you should make when opening a new checking account.

1. Prepare to open a new bank account

You should do some thorough research before opening a new account. Take time to compare checking account options to ensure you choose an account that meets your needs. Don't forget to look into fees and other account details to avoid surprises.

You'll likely be asked to present documentation and provide personal information when opening your new account. You can avoid delays by ensuring you're prepared for the process.

2. Fund your new account

You'll need to make a small deposit when you open your new account. But you also want to consider moving additional cash over to the account to have enough funds to cover your bills once you get your account set up to use it regularly. If you have some money in a savings account, you may want to transfer some of it into your new account for the time being.

3. Review and update your automated bill payment settings

You probably pay at least a few of your bills through your current checking account. You'll want to review the existing automated checking account and debit card payments you have set up through your existing bank account, so you know what payment settings need to be changed.

Reviewing several months of bank statements can be helpful, so you don't miss any bills. Remember that some of these payments may be scheduled through your online bank account, while others may be scheduled directly through the biller's payment portal.

Assessing bill pay settings and updating them to list your new checking account details can ensure you experience no issues when your automated bill payments go through.

Of course, you'll want to ensure you have plenty of money in your new checking account before making this move. Otherwise, you could overdraw the account and may have to pay fees. If you didn't fund your account yet, as mentioned in the step above, do that first.

4. Update your direct deposit settings

Another move you'll want to make is updating your direct deposit settings. If your paychecks are deposited directly into your existing bank account and you plan to close it, you'll need to revise your direct deposit paperwork to list your new bank account details. Do this as soon as possible to avoid a delayed paycheck. The last thing you need is extra financial stress because an expected paycheck isn't in your account when you're counting on it to be there.

5. Don't rush to close your old account

If you don't plan to maintain two checking accounts, you may want to wait a few weeks before closing the old one. By holding off a bit, you can protect yourself in case an unexpected transaction is posted to the older account. Even if you take extra care when updating your payment details, mistakes can happen -- so it's a good idea to wait to close the old account.

You'll also want to keep some money in the old checking account as a buffer during this period. Review your account terms to see if you need to maintain a minimum balance to avoid maintenance fees. Checking account fees add up and can eat away at your bank account balance.

6. Close your previous account when your affairs are in order

When everything is set up, you'll want to go ahead and close the account. You can do this in person at a local bank branch, or in most cases, you can do this online. Your bank may ask you to write a letter stating that you wish to close the bank account. Once finalized, getting written confirmation that your account has been successfully closed is a good idea.

Now you know what actions to take when opening a new checking account. Taking the above steps can help you continue to pay your bills on time and avoid paying extra fees. If you're looking for a new bank account, review our list of best checking accounts to learn more.

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