Switching banks does not have to be stressful, but doing it in the wrong order can cause missed payments, overdrafts and fees. The safest approach is to open the new account first, move your money and payments gradually, and close the old account only once everything has cleared. This checklist walks you through it.
Why people switch banks
Common reasons include monthly fees, low savings rates, poor customer service, a better app or features such as early direct deposit. If you are still comparing options, see Online Bank vs Traditional Bank and our list of online banks with no monthly fees.
Step-by-step checklist
- Open the new account first. Follow the steps in our guide to opening a bank account online, fund it with a small amount and make sure you can log in, see your account and routing numbers and use the debit card.
- List everything connected to your old account. Include direct deposits, automatic bill payments, subscriptions, loan payments, transfers to savings, payment apps and any accounts that receive tax refunds or benefits. Reviewing two or three months of statements helps you catch recurring items.
- Update your direct deposit. Give your employer the new routing and account numbers. You can also split the deposit so part of it goes to each account while you test that everything works.
- Move automatic payments and subscriptions. Update the payment details one by one and confirm each new payment goes through.
- Keep the old account open for a while. Leave enough money in it to cover pending transactions, outstanding checks and any bills you missed. Many people wait at least one full billing cycle, and often one to two months.
- Save your records. Download statements and any tax documents, because some banks make only a limited history available online after you close an account.
- Check the closing terms. Look for early account closure fees, which some banks charge if you close an account within a set period after opening it, and check for any remaining or negative balance.
- Transfer the remaining balance and close the old account. Ask the bank for written confirmation that the account is closed with a zero balance.
- Update everything else. Change your details with linked apps and any tax or benefits agencies, and shred old checks and cards.
Common mistakes to avoid
- Closing the old account before all payments have moved.
- Forgetting a small recurring payment, such as a subscription or an insurance premium.
- Leaving a negative balance in the old account, which can lead to fees and may be reported to a banking reporting agency such as ChexSystems. See what ChexSystems is.
- Not checking whether the new account has fees, a minimum balance or requirements such as qualifying direct deposits.
- Waiting until the last moment to move your direct deposit, which can delay a paycheck.
Keep deposit insurance in mind
If you are moving a large balance, remember that FDIC insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. Confirm the new bank is insured, and read our guide to FDIC insurance if your savings are near that limit.
Frequently asked questions
How long does it take to switch banks?
A full switch often takes one to two months, because you need time for direct deposits, bill payments and pending transactions to move over.
Will switching banks hurt my credit score?
Opening a checking or savings account usually does not affect your credit score, because deposit accounts are separate from credit reports. Some banks do check a banking report such as ChexSystems or run a soft credit check, so it is worth asking before you apply.
Should I keep my old account open?
Yes, for a while. Keeping it open during the transition protects you from missed payments. Once all activity has moved, close it properly rather than leaving it dormant, since some banks charge inactivity fees.
Does my new bank help me switch?
Some banks offer switching tools or checklists, but many do not. Check the bank’s help pages, and do not rely on it to move every payment for you.