discovered a better banking deal? It doesn't have to be complicated to change banks.
It may feel a little intimidating to switch banks. But bear in mind that you own the power in this connection.
Things like exorbitant costs, subpar customer service, or a dearth of the incentives and features you require are not things you have to "just deal with." You can go somewhere else and find better things.
It doesn't have to be a protracted hassle to switch banks. You may break up your relationship with your current bank and begin anew with a new one that will treat you fairly with a little amount of preparation, forethought, and patience.
How to change banks
Here's how to change banks easily and swiftly.
1. Prepare an exit
Like the majority of individuals, you undoubtedly use your bank account to pay at least some bills and receive payments. You can close your account, start a new one, and prevent missed deposits and late payment costs by doing some forward planning.
Make a note of all the payments you receive from your current account, including bills, direct deposits (like paychecks from your employment), linked accounts, subscriptions, mobile apps, and other connections.
Check your previous three monthly bank statements to determine when your payments and deposits typically occur since many recurring payments take place on or around the same day each month.
You'll be able to cross out each direct deposit and automatic payment as they are successfully transferred to your new account later on if you have a solid list in hand.
Try to time the change to occur right after the majority of these electronic payments for the month have been made. You'll give yourself, your employer, and your payees a few weeks to make the necessary changes that way.
2. Pick a new bank.
Compare banks or credit unions before closing your current checking or savings account (or both).
To discover more about online banking features, overdraft protection, automated payment scheduling, and any recurring monthly fees, visit the bank's website or schedule an appointment in a nearby location.
Ask about low-fee checking accounts, competitive interest rates on savings accounts, and any minimum deposit restrictions. To get a better rate of return on your money, think about opening a high-yield checking account.
Don't forget to inquire about credit card options if you rely on a credit card that is affiliated with your previous bank. Using internet banking from a bank account, paying credit card bills is frequently simpler and quicker.
Finally, choose a bank whose branches and ATMs are easily accessible from your location.
3. Establish a new bank account
Open an account as soon as you've located a new bank. Whether you want a checking account, a high-yield savings account, or one of your other account alternatives, be sure you know which product you want.
On the bank's website, you can open an account the quickest. Make sure to correctly provide the bank's name when searching for the website to avoid being forwarded to a phony website with a similar name.
Simply follow the instructions for opening a new account once you're on the bank's website.
You can also open an account in person by visiting your preferred bank during business hours with identification from the government, your Social Security number (or an equivalent), documentation of your address, and some cash to deposit into the account. However, not all accounts require you to make a deposit at first, so be sure in advance.
Last but not least, complete the bank's documentation and thoroughly study your agreement before signing it.
4. Associated bank accounts
You must link the two accounts in order to rapidly transfer funds and payee details from your old account to your new one.
You can do this by selecting the "add an account" or "connect account" option on the website or mobile app of the bank you're leaving.
Send a small amount of money from your old account to your new account by entering the routing information for the new bank account.
Your soon-to-be-old bank will confirm that the connection between the accounts and the minor transfer was successful within a couple of days.
5. any automatic payments updated
The next step is to configure your new account so that it may receive direct deposits and make payments for recurrent expenses linked to your old account.
Inform your company of your new bank account information if your employer pays you by direct deposit. On a blank check or on your online banking website, you can find this information. It's preferable to update your bank information for direct deposits as soon as you can because switching can take one or more pay cycles.
Be sure to account for all potential sources of income, such as Social Security, pensions, investments, and annuities.
Turn off automatic payments from your old account while moving them to your new one. You won't unintentionally pay a bill from the wrong account if you do it this way.
As the invoices are due, set up automated payments through your new bank account. This will guarantee that you remember to arrange all of your payments and protect you from overdrafts or late fees if something goes wrong with the changeover.
Keep your banking details up to date for online payment processors like PayPal and Venmo. A few business days may pass before new accounts are verified.
6. Give a month.
It's possible that not all of your automatic bill payments will immediately transfer to the new account. Payees may need one billing cycle (often one month) to adjust.
This means it's a good idea to hold off on closing your old account completely for a month until all of your automatic payments have successfully transferred to your new account.
Your old account can be closed without worrying about connected deposits or bill payments if all of your payees and deposits have successfully transferred to or from your new account.
7. Send the majority of your funds.
The majority of your money, including your emergency reserves, can be safely transferred to your new bank once your invoices and unpaid debts have been paid. Make sure to get any high-yield savings or investment accounts moved over into equivalents at your new bank.
In general, it's recommended to have a minimal buffer in the previous account in case there are any transactions you overlooked or failed to account for.
Aside from physically transferring the funds to the new bank, making an electronic payment may be the least expensive choice, depending on the banks.
The quickest method, though, is a bank wire transfer or a service like Zelle if you need access to your money right now. Keep in mind that there will likely be a fee associated with the wire transfer when making your decision. Using this helpful tutorial, you may learn how to conduct a bank-to-bank transfer.
To avoid unintentionally incurring fees when you withdraw money from your account, make sure you maintain the minimum balance criteria of your old bank.
8. Close the previous account.
It's time to properly cancel your old account once you're certain that all of your unpaid invoices, checks, and debits have cleared and that your new account is operating as intended.
This can be done over the phone or in person at a bank branch. Call ahead if you're going in person to find out what paperwork you'll need to cancel your account. Be ready for the possibility of a fee from the bank.
Request written closure confirmation from the bank.
To ensure there is a paper trail in case the account is ever reactivated for whatever reason, Consumers Union, the publisher of Consumer Reports, highly advises going the further step of obtaining written confirmation.
Advice: Be wary of "zombie accounts"
Consumer banking professionals advise you to be on the alert in case your previous account becomes a "zombie account" and warn you to be cautious.
When a bank closes an account and then reopens it without telling you, usually as a result of a check or payment clearing, this occurs. In this case, the bank may impose hidden late fees, penalties, and overdraft charges.
You shouldn't need to be concerned about a zombie account biting you if you've successfully and correctly transferred all of your bills to your new account.
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