Key takeaways
Switching banks takes time, but it can be worthwhile for lower fees, higher savings rates, or wider ATM access.
Open and fund your new account before you move direct deposits and automatic payments.
Keep your old account open for about two months so pending transactions have time to clear.
Confirm any new financial institution is legitimate and secure before you share personal information.
If you're wondering how to switch banks, you're not alone. Many people move on when fees climb, savings rates lag, or customer service falls short. This guide walks you through when a change makes sense, what to compare, and how to move your money with confidence.
How to switch banks easily
Switching banks means moving your money and everyday transactions from one financial institution to another. Start by opening and funding a new account that fits how you spend and save. A small opening deposit is often enough to activate it.
Next, move your direct deposits and automatic payments over. Give your employer your new account and routing numbers, then redirect recurring bills, subscriptions, and savings transfers. This step keeps your income and payments flowing without a gap.
Keep your old account open for about two months so any pending transactions can clear. Once everything has moved over, close the old account and ask for written confirmation. Here is a quick recap of the process.
Open and fund a new account.
Move your automatic payments and direct deposits.
Link your checking and savings accounts.
Transfer your money to the new account.
Close your old account after about two months.
When should you consider switching banks?
Changing banks makes sense when your current account no longer fits your life. Here are common reasons people consider switching banks.
The new account offers a higher APY than your current bank.
The new account charges lower fees than your current bank.
Loan options can cost you less at the new institution.
The new bank offers a strong bonus for opening an account.
The new bank has a larger ATM network than yours.
You want to bank in person at a local branch, but yours has none.
You want to move from a brick-and-mortar bank to an online-only bank.
Your current bank's customer service feels unreliable or unhelpful.
Before you switch, ask your current bank whether it can lower your fees or offer a higher APY. Your bank may be willing to work to keep you as a customer.
Things to consider when choosing a new bank
Changing banks shouldn't be a spur-of-the-moment decision. Before you choose a new bank, weigh the factors below so the account fits your needs.
What to compare | What to look for |
Fees | Monthly maintenance, ATM, and overdraft fees, plus any ways to waive them |
Interest rates | A higher APY on savings and any interest-bearing checking options |
Minimum balance | Whether you must keep a set balance to avoid a fee |
ATM access | Convenient in-network ATMs for deposits and withdrawals1 |
Customer service | Support by chat, phone, and in-app, ideally around the clock |
Security | Encryption and two-factor authentication for logins and password recovery |
Mobile banking | An app that lets you manage your money from your phone |
Automatic bill pay | Recurring payments so you can avoid missing a bill |
Early pay | Whether you can get paid up to two days early with direct deposit2 |
Review your options and trust your instincts. You'll want to choose a bank that makes both your life and your finances easier to manage.
5 steps to switch banks
Ready to make the switch? Here's how to change banks in five simple steps.
Step 1: Open a new bank account
First, choose the bank or credit union where you want to open your new account. Need some guidance? Read up on how to choose a bank that fits your needs.
Once you've chosen, you can often open an account online or over the phone. Some banks may ask you to visit a physical branch if one is available.
Each bank or credit union has requirements for opening an account, which often include:
First and last name
Photo identification such as a driver's license, U.S. passport, or military ID
Social Security number
Birthdate
Proof of mailing or physical address
Email and password
Step 2: Update your automatic payments and direct deposits
Make a list of your current automatic payments and direct deposits so nothing slips through. Your list often includes:
Your pay
Monthly bills
Subscription services
Savings contributions
Investment contributions
Cancel subscriptions and services you no longer use. Consider routing that money into an emergency fund in a high-yield savings account instead. Update your payment details with each service you plan to keep.
Finally, update your direct deposit information with your employer so your pay is routed to the new account.
Step 3: Link your savings and checking accounts
Link your new checking and savings accounts so you can move money between them as needed. You can also set up automatic transfers to help grow your savings faster.
Many banks offer overdraft protection, which moves funds from savings to checking to help prevent an overdraft. Opting in can help you avoid overdraft fees.
Step 4: Move your money
Next, move your funds to the new account. You can do this in a few ways:
Withdraw your money in cash and deposit it into the new account.
Request a cashier's check or money order for the full amount, then take it to your new bank.
Transfer money online from your old account, though some banks may charge a fee.
Leave enough money in your old account for several months to cover pending transactions or outstanding automatic payments. This helps you avoid accidental overdrafts and late fees.
Step 5: Close your old bank account
Before you close your old account, confirm that every automatic transfer has moved to your new one. If everything looks good, you can proceed with closing it.
Depending on your bank, you can close your account by phone, by written request, or in person. Ask whether the bank charges a fee to close, since some may do so if the account was recently opened. Request a written verification letter of the closure for your records.
Once your account is closed, destroy your debit card and checks. Keep your bank statements, which you might need for your tax documents checklist when you prepare to file your taxes.
Possible downsides of switching banks
Switching banks can lead to better savings rates, lower interest on loans or credit cards, and fewer fees. Still, it isn't always the best choice. Here are some potential downsides to weigh.
The process can be time-consuming. Between researching your options and moving your deposits and payments, changing banks can take a while.
You may undergo a credit check. Most financial institutions don't run a credit check for a deposit account, but they often will if you also apply for a credit card.
You could overdraft your account. If you forget to update an automatic payment, you might not have enough to cover a bill, which can lead to fees.
There might be hidden fees. Read the fine print to see whether the new bank charges overdraft, ATM, or monthly maintenance fees.
You could fall for a scam. Before sharing any details, confirm the account is with a legitimate, regulated institution that uses strong app security like encryption and two-factor authentication.
Ready to make the switch?
Switching banks isn't overly complicated when you follow the steps in this guide. If you're unhappy with your current financial institution, a well-planned move can pay off over the long run.
Not sure what type of account to open? Learn about the four must-know types of bank accounts.