It may become necessary to leave your current bank, either for convenience or because of services offered. People give a large variety of reasons for changing the financial institutions that they use. When you make the decision to leave your current bank for another, the job can seem a little overwhelming. Studies show that of the 20% of Americans who considered making a change, decided not to because of the effort, fees and hassle associated with the entire process.
The task doesn’t have to be so daunting. With a well-planned approach, you can avoid inconvenience and headaches, and make the transition seamless.
Most Common Reasons to Switch
Interestingly enough, one survey showed that high fees were not the top reason people give for changing banks. Experts say that this trend changes, however, with the amount of media coverage on banking fees that may be currently published. It is often the number one reason to leave your current bank. This is a list of the ten most common:
- Relocation – planning a move or recently moved
- High Fees
- Need a new checking account
- Current checking account no longer meets needs
- Need additional account (checking, savings or other)
- Desire to bank locally (either credit union or local bank)
- Branches not located in convenient area, either because of work or home
- Poor customer service
- Inconvenient ATM locations
- Lack of features, such as mobile banking
Steps to Making the Switch
While many consumers may suddenly close their accounts because they of conflicts with customer service, or for other reasons, that is really not the smartest move. Making a move without planning can cost you money and time, as well as adding stress to your life. Take the right steps when you leave your current bank and keep your banking life stress-free.
Find the New Bank
The first step is to find your new bank before you leave your current bank. Have a new institution ready. This means you will need to do some research to find the right bank or credit union to meet your needs and expectations. This will keep you clear of unnecessary issues when transferring money or paying bills.
Review Automatic Payments
So much of what we do is automated when it comes to our finances. Take the time to review automatic payments, and then transfer them to the new account. Be sure to pay attention to recurring charges, as well. It is really very simple to make the change when you leave your current bank – usually it’s just a matter of changing your account identification and routing numbers.
To be sure you’ve covered everything, look back at your statements for the past year – some accounts may be charged only every six or twelve months. Once you have put together a list, update all your payment information. Wait for about two or three weeks to be sure everything has made the transition to the new account.
After waiting to be certain automatic deposits and payments have transferred correctly, it’s time to move your funds into your new bank account. Here’s a tip: when you leave your current bank, it’s not required that you inform them of your decision in order to move your funds. Make sure you know about things like limits on withdrawals and transfers if you carry a high balance. You may have to move funds on separate days to avoid paying high fees.
Close Your Account
When you leave your current bank, you will need to go into a branch and let them know you will be closing your accounts. There will be some paperwork to sign and you will be required to present identification. Phone before you go so you are prepared. Any remaining funds will be given to you by check.
Get a Letter
This is one of the most neglected steps in the process when you leave your current bank, but it is one of the most important. You need to ask for a letter stating that you have closed your accounts. There have been numerous reports from consumers that a bank re-opened an account (referred to as “zombie” accounts) due to some type of billing mistake or in the case of an overlooked automatic payment. The letter will be vital if you run into any billing or payment issues down the road.
Review and Set Up Automatic Payments and Deposits
After you leave your current bank and you are operating out of your new account, you will still need to watch automatic payments and deposits for a period of time. Working from the list you composed earlier in the process, monitor your account activity to be sure that payments are being made. You will also need to inform your employer or other sources of the change in financial institutions to assure you receive any direct deposits as you normally would.