Published in: Banks | April 1, 2019
By: Christy Bieber
Is your bank bumming you out? Maybe the bank you've been dealing with suddenly raised your required minimum balance, is charging you more fees, or is providing you with poor customer service. Whatever the issue, you don't have to be stuck with a bad bank for your checking or savings account. Instead, you can switch to a different financial institution that will deserve your business.
Unfortunately, switching banks may be easier said than done. There are six steps you'll need to take to make a change, and we'll guide you through all of them here.
Before you switch banks, you'll want to make sure you can find a new financial institution that will meet your needs. You have many options, including national banks, local banks, credit unions, and online-only banks. To find the best one, you'll need to compare a few key features including:
Often, you'll find that there are trade offs when shopping around for accounts. An account that pays a higher interest rate might have a higher balance required to waive monthly maintenance fees, for example.
The key is to explore all of the features of each financial institution and find one best suited to your situation. If you tend to keep a lot of money in your account, earning higher interest matters more than if you routinely run low on funds and need to avoid monthly maintenance fees. And, if you travel often and need easy access to an ATM, that may be more important to you than robust online banking features.
Want to grow you savings? Ditch the traditional savings account for one of The Ascent's best high-yield savings accounts. These accounts can have APYs that are over 20x the national average savings account rate. Start saving today.
When you've narrowed down your list of banks that you're interested in, find out what's required to open an account with the financial institutions you'd prefer. If there's a minimum deposit required when you open the account, you need to make sure you have the funds available to transfer before you start the process.
Chances are good you've got a lot going on with your old bank. You probably have automatic deposits going to the account if you have your paycheck or other sources of income, such as your Social Security check, direct deposited. You may also have bill payments set up to come automatically out of your account.
You're going to need to change all of your deposits and payments to your new bank, but you aren't quite ready to do that yet. For now, just make a list of all of your automatic deposits and payments because you'll need that later.
The next step in the process is to open your new account with the financial institution you selected. You can typically complete an application online to open a bank account. You'll need to provide some basic information, including your name and Social Security number.
You probably will also need to provide your driver's license information and current and recent addresses. And, you may need to verify your identity by answering some basic questions the bank asks. When you open the new account you'll need to specify if it's an individual or joint account. If it's a joint account, you'll also need information about the account's co-owner.
In most cases, your application for a new account will be approved instantly. If the bank needs to verify more info, you'll be told when to expect a decision via mail or email.
Once the account is open, you'll need to fund it. You can do this via electronic funds transfer or by sending in a check to the bank.
Help your money grow with one of The Ascent's top picks for online savings accounts. With sky-high APYs and low fees, these accounts are anything but average.
Once your new account is open and has money in it, it's time to switch your deposits and automatic payments to the account. Just make sure you don't switch payments that debit automatically without ensuring that you have enough money in the account to cover them.
Finally, when you've confirmed your deposits will go into the new account and your automatic debits will be taken from it, it's time to close your old account. You may be able to do this online or via phone, or may have to go into the branch to do it.
If you have any funds remaining in the old account, the bank should provide you with a check for the outstanding balance that you can deposit with your new bank.
Taking these steps can seem like a big hassle, but it's worth the effort. There are many great bank accounts available -- including accounts from online banks -- and you shouldn't be stuck doing business with a financial institution that doesn't meet your needs. Get started on the process today and you'll be happy you did when your money is safely deposited with your new financial institution and you no longer have to deal with the bank that wasn't working for you.
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 20x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2020.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool brand that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2020
The Ascent. All rights reserved.