How to Change Banks

You can switch at any time, but explore all options first

Customers standing in line in bank
••• Jason Dewey / Getty Images

You can change banks any time you choose. But doing so is a process, and can set off mistakes that will cost money. You might not be any better off after the switch. There are ways to deal with concerns about interest rates or service issues without moving from one bank to another.

Better Rates

If you’re switching for higher savings account rates, run some numbers on a compound interest calculator to find out how much more you’ll really earn somewhere else. If you just want a boost in interest earnings, you can open a new account at a different bank and keep both of them open. Online bank accounts, which tend to pay the highest interest rates, are an excellent choice for money you won’t spend immediately.

Lower Fees

If you want to change banks to avoid fees, rule out the alternatives first. Start by letting your current bank know you’re unhappy with the costs and ask what your options are. They may have a variety of products (levels of service) available that you were not aware of. Alternatively, qualifying for a fee waiver may be as simple as setting up direct deposit into your account. Banks will work with you if you ask.

More Convenient Location

If you use a credit union and you’re motivated to switch because of a geographic move, you might not need to change banks. Many credit unions participate in shared branching, which allows you to use branches of other credit unions for deposits, withdrawals, and other services (at no charge).

Evaluate the Options

If you have your heart set on making a change, you need to find a replacement bank. Take your time here and choose well—you don’t want to change banks often because of the time it takes and the opportunity for mistakes. These could cause checks to bounce or direct payments to be missed. Be sure to consider a variety of candidates, including:

Gather Data

You lose access to a lot of valuable information when you change banks. For starters, you won’t be able to search through your old account’s history. If you ever need to research a transaction or prove you paid for something, there’s a lot of value in having a long transaction history. Download everything you need after your last transaction hits the account before closing it.

Be sure to:

  • Download official statements: Those may help you document assets for a home purchase or other loan, and should also have a transaction history.
  • Get images of important checks: You may request copies from your bank if it’s been more than a few months since the check cleared. Many banks include check images in the online statements.
  • Sync your personal finance software: Download or export transactions for easy searching, sorting, and categorizing.

Manage the Process

You also need to manage the account closing process carefully. It’s ideal to change an account when you can devote the time to completing all necessary tasks in a focused manner. A summary of steps is below, but it’s best to follow our complete checklist for changing banks:

  1. Open the new account and link the old and new accounts so you can move money easily.
  2. Get organized: List your monthly expenses (and any less-frequent expenses) that you pay from the account automatically. Fund your new account and start paying those expenses from the new account as soon as you’re able to.
  3. Set up direct deposit into the new account so you don’t need to transfer funds between accounts.
  4. Triple-check that everything is working correctly and that you’re not going to miss any payments. Once you’re certain that everything is properly set up, feel free to close your old account. You may be able to request a closure by phone, or you may need to send a letter.