Are you fed up with your bank and ready to transfer your checking account to a new bank? Bank Transfer Day highlighted the frustration that many people feel with their current bank over fees and service. But you may have been with your bank for years and the process to transfer your checking account to a new bank is overwhelming. While it can be tedious, especially in an age of automatic deposits and deductions, following a plan should allow the process to carry out smoothly.
- Find a new bank and open a new account. Whether at a credit union or bank, get the new account open. The initial funding can be with a check written from the old account. Research the banks in your area to make sure that you get the combination of services, fees and interest that is right for you.
- Change your direct deposit information. Take the new account information to the HR department at your employers, along with a voided check, and fill out any paperwork necessary. Sometimes up to 5 business days notice is needed, so the next paycheck may still go into the old account. Double-check the cutoff date with your human resources department.
- Change automatic payments for utilities, eg. power, phone and cable) and other bills including credit cards so the old account does not get overdrawn and there are no returned check fees. While changing automatic payments often requires a form and a voided check, most automatic payments can be done online or over the phone. If there is not enough time to change the order before the next deduction, make sure to leave enough cash in the account to cover the final withdrawal from the old account.
- Wait two months after all the drafts and deposits appear to have been switched to monitor any activity in the account. This will let you see which, if any, drafts were forgotten, allow for any checks to clear if they have not already, and as long as there is no fee to keep the account open it allows plenty of time to catch any mistakes. If the account does charge a fee, ask a personal banker when is the last day you can keep the account open without incurring more fees.
- Close the old account. Usually there is a form required, and often two forms of ID are needed. The best way is to go in person to the old bank and ask to speak with a personal banker. By this time there should be very little left in the account, so the remainder can be taken in cash and deposited into the new account. Be sure to hang on to the account termination notice for at least 3 years.
Most of the time you will find that if you transfer your checking account to a smaller bank or credit union, you will receive much more personal care, and often find your interest bearing account have higher yields. But even if this is not the case you can take satisfaction in the fact that your money is staying in the local economy.