Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.
Raise your hand if you’re still using the same bank account you’ve had since college.
Chances are, most people you know have been with the same bank for most of their adult life. In fact, the average American adult tends to stay with the same bank for just over 14 years, according to a 2020 Bankrate survey.
The loyalty of many individuals to their very first bank is certainly understandable. Once you open an account, you feel comfortable and it’s hard to bring yourself to go through the process of switching banks. But going through the steps might be worth it: you might be able to get an account with less fees and even get a welcome bonus just for being a new customer.
Here are the four steps to finally change banks permanently.
Subscribe to the Select newsletter!
Our top picks delivered to your inbox. Shopping recommendations that help you improve your life, delivered weekly. Register here.
1. Decide which bank best suits your needs
There are tons of banking options these days, including traditional ones. physical banks as well as new online banks. Consider the following when shopping:
- Minimum deposit requirements
- Minimum Daily Balance Requirements
- Fees – or ways to avoid them, like making direct deposits
- How extensive is the ATM network and if there are any fees for using out-of-network ATMs
- How much interest you will earn
- Mobile app features
- If the account is FDIC insured
At the very least, it’s a good idea to go with an FDIC-insured bank – which means that in the event of a bank failure, your deposits are protected and can be refunded up to $250,000 – and who don’t have no minimum daily balance requirement. The latter can be a real inconvenience as you’ll be charged a fee if your daily balance falls below the minimum, which varies by bank account but can certainly add up.
Capital One 360 Checking® is an example of an account that does not have a minimum daily balance requirement. Users can spend their money without worrying about being hit with fees if they have less than $100 in their account.
Capital One 360® Verification
Capital One Bank is a member of the FDIC.
-
Monthly maintenance fees
-
Minimum deposit to open
-
The minimum balance
-
Annual Percentage Yield (APY)
-
Network of free ATMs
More than 70,000 Capital One®, MoneyPass and Allpoint® ATMs
-
Reimbursement of ATM fees
-
Overdraft fees
$35 if you opt for Next Day Grace
-
Mobile Check Deposit
If you’re looking to earn interest on your balance (which not all checking accounts offer), Alliant Credit Union’s High Rate Check lets you earn 1.00% APY as long as you have a monthly eDeposit recurring and that you opt to receive paperless declarations.
Alliant Credit Union High Rate Verification
Alliant Credit Union is a member of the NCUA.
-
Monthly maintenance fees
-
Minimum deposit to open
-
The minimum balance
-
Annual Percentage Yield (APY)
1.00% with paperless monthly recurring e-deposit
-
Network of free ATMs
More than 80,000 ATMs in the Alliant network
-
Reimbursement of ATM fees
-
Overdraft fees
-
Mobile Check Deposit
Then there are those checking accounts that incentivize new customers by offering a welcome bonus for opening an account and depositing funds or for opening and setting up direct deposit.
Until July 31, 2022, when you open a SoFi Checking and Savings, you can receive a welcome bonus of up to $300 (the exact amount will depend on the amount you deposit). Chase Total Checking® offers a $200 bonus when you open an account and set up direct deposit within 90 days of signing up. Offer expires 7/20/2022. By doing what you’d probably already do with a checking account in the first place – add money and schedule direct deposit – these two offers essentially give you a small windfall of cash.
2. Open your new account
Once you’ve decided which bank you want to go with, it’s time to finally open your new account. You should be able to do this simply online or by visiting a branch in person near you. You will need to provide personal information such as your full name, address, contact information, photo ID, and social security.
Keep in mind that if the bank you choose requires a minimum deposit to open the account, you will need to be prepared to transfer those funds to the account as soon as it is opened.
3. Move your money to your new account
After opening your new account, you can start transferring your money out of your old one. If your old account does not have a minimum daily balance requirement or other fees associated with maintaining an available balance, go ahead and transfer the entire balance to your new account by electronically initiating a transfer, or by following simply the transfer process as instructed by your old bank.
If your old account Is have a minimum balance requirement, keep enough money to cover it until you notify the bank that you will be closing the account. This way, the bank can waive the fee. Keep in mind that your old bank may have its own unique procedure to help you switch to a new bank. Ask up front how it works and if there are any paperwork to complete.
You’ll want to note any direct deposits you set up with your old account, such as automatic paychecks from your employer. Update your new banking information with the relevant direct deposit information as soon as possible. All old automated recurring payments, such as for subscriptions and bills, or transfers, such as to a savings account, must also be set up with your new checking account.
Finally, you can download or print copies of your old bank statements in case problems with past transactions arise after the account is closed. In this case, you will already have the statements at hand and you will not need to contact your old bank to provide them.
4. Close your old account
Visit or call your bank to see if there are specific procedures for transferring and completely closing your old bank account. Once you are ready, meaning all deposits and transfers have been reset to in and out of your new account, you can finally close your old bank account. You might also consider requesting an official letter from your previous bank stating that the account has been closed. This might be useful in the future if you need to resolve past issues.
Check out Select’s in-depth coverage at personal finance, technology and tools, The well-being and more, and follow us on Facebook, instagram and Twitter to stay up to date.
Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.