How To Switch Banks: A Simple Step-By-Step Guide

Maybe your bank hits you with monthly fees. Maybe your savings interest is barely a rounding error. Or maybe you just want a better mobile app. Whatever the reason, switching banks is easier than it used to be, but a rushed move can mean bounced bills, missed paychecks or overdraft fees. Here’s how to change banks the right way, step by step.

Key Takeaways

• Switching banks is a five to seven-step process that usually takes two to six weeks, mostly because direct deposits and autopay can take one or two billing cycles to fully move over.

• Open your new account first, reroute your direct deposit and recurring bills, then close your old account only after every payment and deposit has cleared.

• Closing a checking or savings account does not hurt your credit score, but banks report your account history to ChexSystems, so avoid overdrafts and unpaid balances on your way out.

Summary generated by AI, verified by MoneyLion editors

Why People Switch Banks

There are plenty of good reasons to move your money. Common ones include:

• High or hidden fees: Monthly maintenance fees, overdraft fees and out-of-network ATM fees can quietly cost you hundreds a year.

• Low interest rates: Many high-yield savings accounts pay well above the national average tracked by the Federal Deposit Insurance Corp. (FDIC).

• Weak mobile experience: If your bank’s app crashes or you can’t deposit a check from your phone, it’s fair to want more.

• Life changes: Moving, changing jobs or getting married can shift what you need from a bank.

• Welcome bonuses: Some banks offer a welcome bonus for new customers who set up direct deposit or hit a minimum balance.

How To Switch Banks in 7 Steps

1. Compare Accounts and Pick Your New Bank

Write down what matters most: low fees, high APY, branch access, ATM network, mobile features or 24/7 customer support. Then compare a few options; traditional banks, online banks and credit unions all bring different strengths. Make sure any account you consider is insured by the FDIC or, for credit unions, the National Credit Union Administration (NCUA).

2. Open Your New Account Before You Touch the Old One

Once you pick a bank, open the new account first. You can usually apply online in about 10 minutes. You’ll need your government-issued ID, Social Security number, date of birth and address. Some banks also require a small opening deposit, often $25 to $100.

Make sure to keep your old account open. Closing it too early is one of the biggest reasons people rack up fees during a switch.

3. Make a List of Every Recurring Transaction

Pull up 12 months of statements from your old account. Write down every direct deposit and autopay you find, including:

• Paychecks and other income

• Rent or mortgage

• Utilities and internet

• Streaming and app subscriptions

• Insurance premiums

• Loan and credit card payments

• Annual charges like gym or club dues

Going back a full year helps catch quarterly and yearly charges that can be easy to miss.

4. Reroute Your Direct Deposit

Give your employer your new bank’s routing and account numbers. Most companies use a direct deposit form or an online portal. If you receive Social Security or other government benefits, update those separately through the agency that pays you.

Ask when the first deposit will hit your new account. That date sets your timeline for the rest of the switch.

5. Update Autopay and Recurring Bills

Once you have a rough date for your first direct deposit, start moving your autopay one bill at a time. Log into each biller and swap out your old account and routing numbers for the new ones. If you use your old bank’s bill pay tool, cancel those payments there and set them up again at your new bank. Consider moving a few bills at a time instead of all at once, so you can catch any issues before they snowball.

6. Move Your Money Over

Once direct deposit is landing in your new account and autopay is running from it, transfer the bulk of your funds. Leave a small cushion, enough to cover a stray check or forgotten subscription, in your old account for another 30 to 60 days. Electronic transfers are usually the fastest way to move money.

7. Close Your Old Account

When you’re sure nothing is still coming in or going out of the old account, close it. You can close online, over the phone or at a branch. Ask for written confirmation and save it. Then destroy your old debit card and any leftover checks to protect against fraud.

Common Mistakes To Avoid

• Closing your old account too soon: Wait at least one or two full billing cycles.

• Forgetting annual charges: Yearly memberships and quarterly premiums are easy to miss, so make sure to double-check everything.

• Skipping the paper trail: Save your final statements and closure confirmation.

• Letting your old account go negative: Unpaid balances can hit your ChexSystems report and make it harder to open a new account later.

The Bottom Line

Switching banks is more about patience than paperwork. Open your new account, move your direct deposits and autopay in stages, and only close your old account once everything has cleared. Take it step by step and you can be up and running with a better bank in a month or less.

FAQs

Does switching banks hurt your credit score?

No. Checking and savings accounts aren’t reported to the three main credit bureaus, Equifax, Experian and TransUnion. Your banking history goes to ChexSystems, which is separate from your credit score.

How long does it take to switch banks?

Opening a new account can take a few minutes online. The full switch usually takes two to six weeks, mostly because payroll and autopay updates run on billing cycles.

Can you have accounts at more than one bank?

Yes. Many people keep a checking account at one bank and a high-yield savings account at another to earn more interest.

Should you switch banks if you’re moving?

Not always. If your current bank has strong online tools and a wide ATM network, you may not need to. But if you’ll lose branch access or run into out-of-network fees, a local bank or credit union could make sense.

Key Terms

Direct deposit: An electronic payment sent straight from a payer, like your employer, to your bank account.

Autopay: A recurring bill payment set up to withdraw from your account on a set schedule.

Routing number: The nine-digit number that identifies your bank. You need it to set up direct deposit or autopay.

ChexSystems: A consumer reporting agency that tracks checking and savings account history, including overdrafts and closed accounts.

Sources

• Consumer Financial Protection Bureau: What is the best way to move my checking account to another bank or credit union?

• Consumer Financial Protection Bureau: Moving Your Checking Account

• Federal Deposit Insurance Corp: Thinking About Moving to Another Bank?

• Social Security Administration: Update your direct deposit