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Everything You Need to Know About How to Transfer Banks

Doing your homework and learning how to transfer banks ahead of time can help make the process more seamless.

Chris Scott

Contributing Writer at Tally

May 31, 2022

Are you looking to transfer banks? Perhaps you’re moving and your branch doesn’t have locations there. Maybe you’ve found a bank with a better interest rate. Or, it could be that you’re unhappy with your current bank and want to open a new account elsewhere.

This article will walk you through everything you need to know about how to transfer banks. We’ll go over:

  • The steps you need to take to transfer banks

  • Some of the things you need to consider when selecting a new bank

  • Alternatives you may want to think about instead of a bank

How to transfer banks

If you would like to switch banks, it’s important to take the time to understand how the process works. Understanding how to transfer banks can simplify the process and ensure that all of your money makes it from your old account to the new account. Below is a simple step-by-step guide to transferring banks.

1. Find and open a new bank account

To move money out of your old bank account, you need to have a new account ready. Step one is finding a new financial institution that you would like to bank with. (In the sections below, we’ll go more in-depth on what you should be looking for when choosing a banking service).

Once you choose a new bank, open an account. You can do this online or in person. You’ll need to provide a bit of information, including your:

  • Legal name

  • Social Security number

  • Contact information

  • Address

  • Driver’s license or passport information

  • Other requested information, such as your current income or employment status

Once approved, you’ll receive your new account information. This includes your routing number, account number and possibly a debit card.

Note that you may be required to have a minimum balance to open the new account, so make sure you have enough money on hand to cover the minimum balance. 

You may be able to transfer money from your old account to your new account to cover this balance, though there could be a fee associated with it. You may be able to write a check from the old account and cash it into your new account.

2. Ask about a switch kit

With a new account established, consider asking your new bank if they offer a “switch kit.” A switch kit is essentially a service that your new bank may offer to help you transfer funds. You can find out if this is an option by asking a customer service representative or doing a quick online search.


3. Compile a list of automatic transactions on your old account

If you’re switching checking accounts, you may have set up automatic transactions on the account. Examples include:

  • Automatic bill payments for a credit card

  • Bill pay for services and subscriptions, including internet or streaming services

  • Automatic deposits or recurring transfers into an investment account

Pour through your recent bank statements to compile a list of any automatic payments that you’ve set up. You would have received these statements in the mail or accessed them via an online account. 

You’ll then need to prepare to switch these recurring transactions to your new account. Remember that your new account may have a minimum balance, so you’ll want to make sure you have enough money to pay the bills and maintain the required balance.

4. Reconcile your checkbook

Reconciling your checkbook ensures there are no outstanding checks. If you have an uncashed check from your old account, reach out to the recipient and ask them to deposit it. Again, make sure that you have enough money in your account to cover the transaction. Otherwise, you could be charged overdraft fees.

You can also ask the recipient if they’d prefer you to write a check from the new account. If this is the case, ask the recipient to void the check and send you a confirmation. If you can’t get them to do that, you can void the check with your bank.

5. Switch direct deposits to your new bank

Once your new bank is established, you’ll want to switch direct deposits to this account. The most common direct deposit would be a paycheck from your employer. Confirm with the employer when this switch will be made. Sometimes, direct deposit changes don’t go through for a few weeks. You shouldn’t close your old account until you can confirm the switch.

6. Close the old account

Consider keeping your old account open for a couple of months to ensure all switches have been made properly. Once you can confirm that there has been no account activity on the old account for a few months, you can close it.

Contact your bank’s customer service department to close the account. The bank may require you to send a written notice confirming the closure. Also, be aware that some banks may charge fees to close accounts.

Upon closure, discard any old debit cards or unused checks from the account. You can cut up or shred these items for security.

What to consider when selecting a new bank

Now that we’ve covered how to transfer banks, let’s look at some of the things you may want to consider when choosing a new financial institution. Below are some questions to help determine the best bank for you:

  • Type of account. What type of accounts am I looking for? Does the bank offer both checking accounts and savings accounts? Does it offer money market accounts?

  • Locations. Does the bank have physical brick-and-mortar locations? Or does it exist solely as an online bank?

  • ATM availability. If the bank is an online bank, how do ATM withdrawals work?

  • Interest rates. Does the account offer a higher interest rate yield than the one I’m currently receiving?

  • Fees. What are the monthly fees on the new account? Does the account offer lower fees than those I’m currently paying?

  • Online tools. Does the bank offer a mobile app for transactions? Can I deposit checks via this mobile app? What other mobile banking features exist?

  • Automation. Does the bank offer automatic bill pay?

  • Safety. Is the bank member FDIC insured?

Answering these questions can help you hone your search and find the financial institution that’s right for you.

Alternatives to banks that you may want to consider

One last thing to consider when choosing a financial institution, one last thing is whether a traditional bank is right for you. You may want to take the time to compare credit unions and banks.

Credit unions can be advantageous because they may offer higher interest rate yields, though some require membership fees. Banks can be beneficial because of their often vast network and ATM access.

Consider researching which type of financial institution and account best fits your financial needs.

Take steps to ensure you are banking at the right location

When it comes to choosing a bank, there are many things to consider. You may want to think about interest rates, fees, whether you need a checking account or savings account and whether you need ATM access.

The right bank for you ultimately has a lot to do with your preferences. What may work well for one might not necessarily be the best fit for another and vice versa. 

If you decide to make a switch, take time to understand how to transfer banks so that the process goes smoothly. Also, consider all of your options and think about alternatives like credit unions.

Choosing a bank is just one component of managing your personal finances. If you’re looking for more tips and tricks to help you along your financial journey, consider subscribing to Tally’s† newsletter. Tally’s newsletter is delivered straight to your inbox, keeping you up to date with the latest information on everything from investing to debt management.

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