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Step-by-Step Guide to Switching Checking Accounts: Making a Smooth Transition 

Step-by-Step Guide to Switching Checking Accounts: Making a Smooth Transition

Wondering how to switch banks? Considering a credit union? A new checking account may be perfect for your lifestyle. There are times when switching banks is necessary. If you move to a new state, having a local bank nearby is convenient.

But what if you want to switch banks for another reason? What if you’re tired of high fees, want better interest rates, or are simply looking for more perks? Switching financial institutions may seem like a headache. Still, with a bit of foresight and planning, you can smoothly transition to your new account and start enjoying the benefits immediately.

1. Find a New Financial Institution: A Credit Union May Be Best

Before opening a new checking account, you must decide where to move your money. You have several choices, including a traditional bank, credit union, or online bank.

With so many choices, it helps to create a checklist of items most important to you. This gives you a tool to shop around, compare, and consider the best account to suit your needs. Look at:

  • Opening deposit
  • Features and benefits, such as automatic bill pay
  • Fees
  • Minimum balance requirements
  • Interest rates you’ll earn on savings
  • Branch and ATM locations
  • Online and mobile banking options

And keep in mind that the answer might be more than one checking account. Credit unions offer a variety of benefits by being member-owned, such as fewer account fees, lower interest rates on loans and credit cards, and more personalized service. Coupling it with investment accounts in bigger banks may be just what you’re looking for.

2. Make a List of Automatic Deposits and Payments

We’ve perfected the art of simplifying our financial lives through recurring transfers and bill payments. To avoid complications and mishaps, you must ensure these transfers are correctly switched to your new accounts.

As you make plans to switch to a new checking account, make a list of:

  • Automatic deposits: Direct deposits, alimony or child support payments, government benefits, and recurring transfers from other financial accounts
  • Automatic bill payments: Mortgage or rent, utilities, credit cards, and loans
  • Recurring subscriptions: Any payments you’ve set up on a recurring plan, such as streaming services or gym memberships
  • Recurring transfers: Payments from or to retirement and investment accounts

Use several months of statements to ensure you’ve accounted for all your transactions. Some transfers occur quarterly or even yearly, so capturing all your information is essential before the move.

3. Open an Account

Opening a new account is fairly easy once you’ve found the right checking account to suit your needs. Many allow online enrollment, which makes it easy to switch your accounts. However, if you want a more personalized experience, you could stop by a branch or open an account over the phone. Credit unions are well known for their friendly service and make opening a new checking account easy. You’ll need:

  • Name
  • Date of birth
  • Social Security number
  • Mailing address
  • Phone number
  • Email address
  • Driver’s license number or other ID

You’ll also need your old account information and routing number to transfer money into your new account. Keep in mind that verification may be required before you fully activate the account.

When opening an account in person, you could withdraw cash from your current account and use it to make your initial deposit. This would give you instant access to the money you deposit.

4. Sign Up for Extras

Once you have your new credit union checking account, it’s time to make it work for you. What conveniences will make your life easier?

Enroll in online and mobile banking to access your account from anywhere. You can work with a customer service agent when you open your account or visit the website. They often have easy ways to turn on online features and download your new mobile app. You should be able to use the same ID and password you set up when you opened your new account. Depending on the account, you may also have to set up multi-factor authentication features.

Then, access any additional perks that may interest you:

  • Debit cards can be a convenient way for in-store purchases, online purchasing, or getting cash from an ATM. Some may even offer cashback opportunities.
  • Incentive programs that help you save even more. Some offer reward programs or ways to increase your savings potential.
  • Order checks to have them on hand for making payments.

5. Update Your Automatic Deposits and Payments

Once your new account is open, you’ll have to do a little work to switch accounts fully. You’ll need to ensure all automatic payments and deposits are switched and moved over.

Start by going through the list you created once again. Are each of your deposits and payments still relevant? Changing to a new checking account gives you an opportunity to clean up any old services that are no longer serving you. Get rid of any unnecessary subscriptions to save even more money.

With a clean list of recurring transactions, it’s time to update the account information:

  • Start with direct deposits. Update each one individually with your new bank account details.
  • Reschedule all automatic bill payments using your new checking account information.
  • Set up all recurring transfers, such as deposits from checking to savings. Since you’ve deleted unwanted transfers, this allows you to start new habits. Maybe a new account will help you save for something big.

6. Close Your Old Account

Once you’re satisfied that all your automatic transactions are transferred to your new account, your final step is closing your old account. Don’t be in a rush to complete this step. Leaving money in the account and monitoring it can help you avoid costly mistakes, such as forgetting to transfer an important payment.

When ready, you can contact your old bank and close the account. Depending on the institution, you’ll need to do this in person, online, or on the phone.

Bottom Line

Whether out of necessity or because it makes sense financially, opening a new checking account can be a wise move. Knowing what’s expected before you start helps you switch banks without feeling overwhelmed.

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