subject: Switching Banks - A Step By Step Guide [print this page] People remain with bad banks longer than they remain in bad relationships, just because it can be very challenging to break those ties. This is truer now than ever before, since many people have their accounts tied to direct deposit, automatic bill pay, online forms, and a host of other important things that can be a hassle to change over. But if you're drowning in fees, there's really no reason to stay where you are. It may be a hassle to switch, but it's worth it. Here's a step-by-step guide to help you do it.
Open a New Account
The first step in switching banks is to open a new account at the financial institution of your choice. After all, it usually takes only a hundred dollars or so to have your choice of accounts, so you should do this before you sever ties with your old account. Make your first deposit and wait until they provide you with a debit card, assuming you make regular use of one. Make sure you have full use of the account before you start switching things over.
Tally Your Expenses
Before you can start making the switch, you need to make a list of all your regular expenses, paying close attention to the ones that come out of your account automatically each month. You don't want to shut down your current account until you are ready to set up your new account to pay those bills. It may even be worth it to plan on a transition period where you write manual checks for a month or two while you get things switched over. Banks are usually quick to make the changes, but the same may not be able to be said for your billing accounts.
Fund Your New Account
Once you have your new account open and available and you know the bills that need to be paid, it's time to start funneling your income into that account. If you prefer direct deposit, give your employer the details of your new account and have them switch the paperwork. Because you probably have bills due at various points in the month, this is the part that can get tricky, especially if you live somewhat paycheck-to-paycheck. This is why it's a good idea to go manual with your bill paying for a month or two until all of your funds are fully switched over.
Close the Old Account
If you're getting nailed with fees, you can't afford to keep your old account open longer than you need to. Close it at your earliest opportunity and don't let them talk you into keeping it open for emergencies or the other things banks are known to try when they see they are losing a customer. If they cared about your business, they would have provided a hospitable place to hold your money to begin with. Close the account, sever ties, and enjoy your new financial institution.
