If you currently have a checking account, but you’re thinking of switching to another one, you might be wondering how to make such a significant financial change.
Your financial institution wants to keep your business, so the idea of you switching accounts isn’t good news for them. Subsequently, it isn’t always the most straightforward process for you. Sometimes the number of steps required can make you stick around to avoid them, while other accounts will have fees wrapped into their closing process.
There are several steps you need to take to make switching checking accounts as simple as possible. Here is a five-step checklist that answers all of your “how to switch checking accounts” questions.
Before you can switch accounts, you have to complete the process of opening a new one.
What’s the reason you want to make the switch? Ensure that you’re improving your banking situation before going through the process of updating your financial information. Some things to consider are the conveniences and benefits associated with the account, any required fees, balance requirements, and the bank or credit union itself.
You need to complete the full process, make your initial deposit, and get all of your new account information, including your account number and routing number. Also, be sure that you have your new debit card and a checkbook so you can easily access your funds before you switch accounts.
One of the most dreaded parts of switching a checking account is changing over your automatic deposits and withdrawals. You don’t want to miss any of your withdrawals and start accruing late fees and returned check fees due to missed payments.
Compile a list of your deposits and withdrawals. Carefully review your account statements over the last year. It’s essential to look at this extended period because you might have monthly, quarterly, or annual charges. If you only look at one month or three months of statements, you could miss something.
Some transactions to look for include.
Automatic bill payments
Once you have this list, go to each creditor or payor and provide your updated information. Doing so makes sure that your withdrawals and deposits are reflected on your new account.
These changes might take some time to go into effect, so you want to complete the process of switching things over to your new account as soon as possible.
While you might be tempted to transfer all of your money to your new account as soon as possible, you want to pause this step. Instead, you should leave some money in your old account for a period so it can catch any potential transactions that come through that you might have missed or to take any deposits that might not have transferred to your new account yet.
It’s wise to keep the account open for a couple of months to make sure your account information has been updated and that you’re in the clear. Even if you have to pay monthly maintenance fees on the account, it’s better to be safe than sorry with your finances.
Once you’ve waited a few months to ensure that all transactions have switched over to your new account, you have two options. You can close your account or repurpose it.
You should close it if you have no desire to use it again or can’t identify a need for it. However, if you could benefit from an additional account to help with budgeting, reducing your spending or anything of that nature, you could repurpose the account.
Financial institutions have different closing procedures. Some will require that you do so in person, while others allow you to conveniently complete the process over the phone, online or via their mobile app. Get all of the details on your bank or credit union’s closing requirements.
If you choose to close the account and it’s with a bank or credit union you’re no longer using, be sure to leave your updated information in case they need to get in contact with you about something related to the closed account.
If you’re closing your account and moving it to another bank or credit union, consider if the other services you’re currently enrolled in are still necessary for you.
For instance, if you have a safe-deposit box or savings account, you might want to consider moving it to your new banking institution for your convenience.
Although it might take a few steps to complete the process of switching checking accounts, having a step by step process to get it done certainly makes the change easier. Once you open your new account, update all of your automatic payments, and transfer your money, it should be smooth sailing from there.
If you’re considering a switch, but you haven’t yet narrowed down your new option, check out our checking accounts at Partners Financial FCU. We offer several checking accounts with no monthly maintenance fees or minimum balance requirements, mobile banking and online banking access, ATM transaction fee reimbursements, overdraft services, and more.