Updated December 4, 2023

How to Switch Banks

Read more about Closing a Bank Account

Switching banks isn't complicated. But, there are several things you have to do first. Read to find out.

Does your current bank no longer spark joy?

Whether it's an unpleasant experience or a tempting offer from another bank, perhaps it's time for a change.

Learn the simple steps to switching banks and how to make sure you don't regret it.

How quickly can you switch banks?
Opening a new bank account usually only takes a day. However, the process of transferring recurring deposits and transactions to your new account can take at least a month.

Why People Decide to Switch Banks
Below is a table showing different reasons for switching banks.

35%Wants a change[1]
31%Current bank's charges are too high[2]
15%Events indirectly related to their finances[1]
15%Prioritizes good rates[1]
13%Wants better online access[1]
11%Attractive signup bonus[1]
9%Wants better customer support[1]

How to Switch to a New Bank?

Switching banks can be a straightforward process if you plan it carefully and strategically. Below are 6 steps to take if you decide to move your deposit account to another bank.

What do you find most daunting about the process of switching banks?

Pick A New Bank

Look for a bank that offers services, fees, and features aligning with your financial needs and goals. You should also compare interest rates, account options, online banking capabilities, and branch locations (if planning to move to a brick-and-mortar bank).

Many banks have a switch kit, which is a set of tools and resources to help you smoothly transition from one bank to another. Check if your prospective bank has one since it may provide a more seamless and tailored process.

List Recurring/Automatic Transactions

Identify recurring transactions linked to your account such as:

  • Automatic bills payment
  • Automatic direct deposits
  • Recurring transfers and payments

You can check your statements in the last 12 months to ensure that you won't miss any during your transition to a new bank.

Additionally, if your current account has rewards, use them up so you don't forfeit them when you eventually close your account.

Open Your New Account

Most banks will allow you to open an account in person or online. To ensure a smooth process, come prepared with necessary requirements and information.

They usually ask for the following:

  • Personal Information (e.g., name, date of birth)
  • Contact Information (e.g., email, phone number, residential address)
  • Social Security Number (SSN) or Employer Identification Number (EIN)
  • Government ID (e.g., driver's license or state ID card)

You can also set up online and mobile banking right away. Do test transactions to see if everything works and activate alerts according to your preference.

How hard is it to switch banks?
Switching banks is typically not so complicated, especially since some banks allow you to do everything online. However, it can require some legwork on your part if you have a lot of transactions that rely on your account.

Redirect Your Direct Deposits and Automatic Transactions

Inform your employer, billers, and payors to update your banking information with your new account details for future transactions.

Sort out any postdated checks you have issued as well by providing alternative payments to those involved. Doing these will help avoid penalties arising from delays in receiving or making payments.

Transfer Remaining Funds From Your Previous Account

You can empty out your old account by doing any of the following:

  • Withdraw cash at a branch or ATM
  • Transfer electronically to your new account
  • Request a check from your bank

Just make sure to only transfer remaining funds after all automatic transactions have been switched to your new account which could take a few months.

Can I switch banks if I have a loan?
You can switch banks even if you have an existing loan with the bank (unless your loan agreement prohibits you from doing so). That said, some loans may have been granted under the condition of keeping your deposit account with the same bank.

Close Your Old Account

Make sure to close your account immediately after you've transferred all the remaining money in it. Otherwise, your bank might charge you a monthly fee if your balance falls below the minimum requirement.

If your old account does not have a minimum balance, keep it open until you are sure that your direct deposits and recurring transactions are no longer coming through.

Additionally, check with the bank for any closing or early account closure fees, and settle them accordingly. Safely dispose of your bank card and remaining paper checks to prevent fraudulent transactions.

Ask your old bank for a confirmation letter to verify the closure of your account. In your closure request, specify that all future transactions should be canceled to avoid potential monthly fees and identity theft risks associated with a dormant account.

When Should You Switch Banks?

Generally, you may move from one bank to another when your current bank is unable to meet your financial needs and goals.

Other reasons to switch banks include the following:

  • Better Interest Rates
    If you are coming from a traditional bank, you might be tempted by the higher APYs of online banks. This may be worth considering if you tend to keep high balances that barely grow in your current bank.

  • Less Fees
    Many banks have free checking options, which can be helpful if you want to save on fees. Others either waive incidental charges or have lower fees on excess withdrawals, overdrafts, out-of-network ATM use, etc.

  • Attractive Perks
    Banks may offer sign-up bonuses from time to time, which can be anywhere from $100 to $500 for regular checking accounts. This extra cash may boost your funds, pay toward minor debts, or cover small expenses.

  • Relocation
    If your account is with a regional bank, it may not be available in your new location. Thus, you'll have to find a new bank with a nearby branch.

  • Unsatisfactory Service
    Frequent runaround treatment, like poor online banking service or security issues, can be a dealbreaker, pushing account holders to seek better options.

Although your current bank may have fallen short of your expectations, don't be too rash in your decision without reading the next section.

Will switching banks affect your credit?
Generally, switching banks won't really affect your credit score. As long as you don't leave unpaid balances on credit products, like loans and credit cards, then you should be fine. However, do note that activity involving bank accounts or deposit products is tracked by the ChexSystems instead. Your new bank may run your ChexSystems report to determine if they will approve your account opening or not.

What is your primary reason for considering switching banks?

Tips To Land the Right Bank

Here are some things to consider when searching for another bank:

  1. Consider a better account option first.
    Check if your current bank has other account options first. For example, if you are annoyed by fees, they might have a free checking option that could save you $10 to $20 each month.

    Discuss your options with your bank's relationship manager before considering a switch.

  2. Do your research.
    Bank reviews and input from family or friends who use the bank you're considering are valuable. If many customers share a concerning issue, continue searching for other banks.

  3. Look at other bank types.
    If you're unsatisfied with major banks, consider smaller banks, online banks, or credit unions. These types of financial institutions may offer more personalized services, avoiding another big bank switch.

  4. Call your potential bank.
    Banks may make an extra effort to impress potential clients. Test their customer support by assessing response time, efficiency, and available options. Visit their physical branch, if available, for a more in-depth experience.

  5. Make sure it's covered by insurance.
    Although most financial institutions are insured either by the FDIC or NCUA, always check if the bank you're moving to is. Note, however, that these insurance agencies only cover up to $250,000 of your deposit balance if the bank were to go under.[3][4]

What feature is most important to you when choosing a new bank?


Can you switch banks without closing an account?
If you don't plan to use the old account anymore, you must close it since the bank may not automatically do so. They may even continue to charge monthly fees. However, you can keep your old and new accounts as long as you can manage having both.

Which banks give you money for switching?
Several banks, like Bank of America and Chase, entice you to switch to them by offering attractive sign-up bonuses. However, their promotions are often limited-time offers. So if you see one, you better grab it before it's gone.

Do you get all your money when you close a bank account?
You can withdraw all your remaining funds before you close your account.

But even if you have closed it, the bank is legally required to return any money left in your account after deducting any applicable fees. They usually send it back by mailing a check.

Bottom Line

Switching banks is a big financial move that can help you improve how you manage your finances. It can even bring you better banking opportunities in the long run.

But, remember to think this through before making the move. Look at the benefits of your potential bank, such as lower fees, better customer support, or higher interest, so it becomes a good decision.

May this endeavor take you to greater financial success and peace of mind!


  1. ^ Yahoo Finance. Here's Why 1 in 5 Americans Are Considering Switching Banks, Retrieved 12/04/2023
  2. ^ GlobeNewswire. Nearly a Quarter of Consumers Are Likely to Switch Banks.., Retrieved 12/04/2023
  3. ^ FDIC. Your Insured Deposits, Retrieved 11/06/2023
  4. ^ NCUA. How Your Accounts are Federally Insured, Retrieved 11/06/2023

Write to Penelope Besana at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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