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How to Make the Switch to a New Bank

How to Make the Switch to a New Bank

Jenius Bank Team9/13/2023 • Updated 4/4/2024
Two mobile phones showing a bank account moving from one institution to another.

Switching banks doesn’t have to be a headache. In fact, you may be able to do it from your phone.

Many people choose a bank when they first strike out on their own. And then they stay put, even when their friends are getting better rates or services somewhere else.

While switching your checking or savings account to a new bank may sound like work, it could actually be easier than you think. You just need to know how to make the switch, so nothing gets lost in the shuffle.

Below we’ll walk you through five simple steps to switching bank accounts.

Key Takeaways

  • If your bank isn’t supporting your financial needs and goals, you had a bad customer service experience or you never stop by your local branch, you could move to a new one. With digital banks, you may be able to open an account in just a few minutes.

  • It’s important to stay organized and check your current bank’s requirements for closing accounts.

  • Research different banks before you make the switch to find the right one for you.

5 Steps to Switch Bank Accounts

There are many reasons you may choose to change where you bank, from higher rates on your savings account to easier access to your money. Switching from one bank to another doesn’t have to be difficult, you just need a plan.

While the exact steps may vary slightly depending on your situation, these five simple steps may help put you on the right track.

Step 1: Research Your Options

You have several options for where to keep your money, from traditional banks and credit unions to digital banks.

As you begin your search, it may be helpful to make a list of what you want from your new bank. Some features you may look for when choosing a new account include:

  • Automatic bill payment

  • Mobile check deposit

  • No fees

  • Higher rates

  • Online and mobile banking services

  • Accessibility

Once you’ve found the right bank for you, it’s time to start the swapping process.

Step 2: Open the New Account

The next thing you should do is open an account at your new bank. This way, you have somewhere to transfer the funds to when you close your original account.

The exact documents you need to provide for opening your account may vary, but most ask for the following:1

  • Your Social Security Number or Taxpayer Identification Number

  • A government-issued ID like a passport, driver’s license, or state ID card

  • Proof of your address, like a utility bill, lease agreement, or a bank statement from your current bank

  • Money to deposit into the account (Some banks have no minimum deposit requirements.)

Certain banks may require specific forms of identification, and others may require a minimum deposit amount to open a new account. Be sure to check their requirements so you have the necessary information on hand.

Step 3: Update Automatic Deposits and Payments

Take a moment to list any automatic bill payments, direct deposits, or recurring transfers taking place from your current account. It may be helpful to go through a few recent account statements to ensure you don’t miss any. (This is also a good time to check in on your expense tracking!)

Once you have your new account information, you want to update these transfers with the new account information.

  • Start with Direct Deposits: If you have direct deposits set up for your paycheck or other income, update these first. It may take one or two pay periods for your direct deposit to be updated.

  • Reschedule Automatic Payments: Go through each of your automatic payments and update them with the new account information. Similar to direct deposits, it may take one to two billing cycles for these changes to take effect.

  • Set up Recurring Transfers: If you have recurring transfers set up, such as transfers to saving accounts for specific goals, be sure to set these up with your new account.

Since it may take some time for any automatic payments and deposits to be updated, it’s a good idea to leave funds in your old account to cover automatic bill payments to avoid any overdrafts.

If you’re concerned about overdrawing your account, you may want to cancel automatic bill payments for a month or so and pay them manually.

Step 4: Transfer Funds

Once your new account is open, you’re able to transfer money into it. Most banks are able to handle electronic transfers, meaning you may be able to login to your old account and transfer funds to the new one.

The transfer process may take some time depending on your current bank’s requirements and setup, typically 1-3 business days. Keep in mind that your bank may require you to leave a minimum amount of money in your old account until you formally close it.2

If your old bank has any minimum deposit or balance requirements, be sure to leave at least that much in the account to avoid fees.

As we mentioned, it’s a good idea to leave some funds in your old account until you’re sure everything is set up with your new one. This way you’re protected against overdrawing your account if bill autopayments take some time to update.

Step 5: Close Your Old Account

Once direct deposits and autopayments are updated and you’ve transferred funds into your new account, you’re ready to close your old account.

Most banks ask you to verify your identity, and some may require you to submit a written request.

Some account closures may require additional information or steps. For example, if there’s a joint account holder or if there are any outstanding situations, such as the account being overdrawn. Each bank has its own process for handling these types of situations, so be sure to contact them with questions.

Once you provide the required documents and the bank confirms the account has been closed, destroy your old debit cards to prevent any confusion.

If there are any funds left in the account, ask how those are distributed. Some banks may issue a check that for you to deposit at your new bank, while others may allow you to transfer your funds electronically as part of the closing process.3

Final Thoughts

Moving your money to a new bank account doesn’t have to be stressful. After all, you’re making the switch to (hopefully) make banking more convenient.

By following the above steps, you should be able to switch fairly quickly. Switching banks may be a great way to get a higher rate on your savings accounts or make accessing your money more convenient.

Switching Bank FAQs

Still have questions? Here are answers to a few frequently asked questions about switching banks that may help you feel more prepared to start the process.

Does switching banks affect my credit score?

In most cases, no. Banks don’t usually check your credit score when you open a new checking or savings account, and without the hard credit check, your score shouldn’t be impacted by this action.

How long does it take to switch banks?

The timeline depends on the banks you’re working with and how many automatic deposits and autopay bills you have set up.

While it’s often possible to open a new account in as little as one day, your account may not be fully set up with automatic deposits or autopay for several weeks. You may find it best to give yourself a month or two before closing your old account. This way, you won’t have to worry about missing bill payments or not receiving your paycheck on time.

Should I close my old account before opening a new one?

It’s rare that you’d want to close your old account before opening a new one. By opening a new account first, you have a safe place to transfer your current funds.

Can I switch banks online?

It depends on the bank. As a digital bank, Jenius Bank plans to let you take care of all of your banking needs online, including opening new accounts and transferring funds from old ones.

However, some banks may still require you to visit a branch in-person to provide identification or other documents.

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