How to change where you bank

Switching to a new bank account may seem like a daunting task filled with complex steps and potential pitfalls. However, with the right preparation the process can be surprisingly straightforward. In this post, we'll walk you through the essential steps to successfully transition to a new bank account, ensuring you cover all bases without any hiccups.

Step 1: Update Your Direct Deposit

The first step in transitioning to a new bank is to update your direct deposit information. This change is crucial as it affects where your salary or any other regular income is deposited. Most employers will allow you to update this on your own in your payroll tool (HRIS), but otherwise you can request a direct deposit form from your new bank—most banks provide this on their website or at a branch. You'll need to provide your new account number and bank routing number, which are typically found on your bank statements or online banking portal.

Inform your employer's payroll department of the change. It’s a good idea to time this update close to the start of a new pay period to avoid any delays. Some employers may also require one or more pay cycles to process this change, so ensure you maintain sufficient funds in your old account until the transition is complete.

Step 2: Update your largest autopays

Once your paychecks are headed to the new account, the next step is to update your largest automatic payments. These likely include your mortgage, car loans, or credit card payments. Prioritizing these larger items helps you avoid any service interruptions and moves the majority of your outflows to the new account with comparatively little effort.

To update your autopays, log in to the accounts and update your auto payment settings. For less technologically sophisticated service providers you may need to contact them directly, but this is increasingly uncommon as companies modernize. Make sure to pay attention to any potential delays in processing changes to ensure your next payment is not missed.

Step 3: Transfer the majority of your money

With your paychecks and largest expenses updated it’s time to transfer the bulk of your money to the new bank account. It’s wise to keep some funds in the old account to cover any autopays or charges that might come through during the transition period.

Step 4: Update the rest of your autopays

Now it’s time to update the rest of your autopays. This may include smaller subscriptions or memberships, such as utilities, internet, gym memberships, streaming services, and other credit card payments. As with larger autopays, ensure you account for processing times to avoid any missed payments.

You’ll also want to update other payments apps connected to your bank like Cash App or Venmo. Look at the last month or so of transactions in your old bank account to make sure you’ve identified all the payments that come out of your old bank account.

Don't forget irregular transactions

Lastly, do not forget to account for transactions that do not follow a monthly billing cycle. These can include semi-annual insurance premiums, annual memberships, or quarterly tax payments. Missing these can lead to lapses in coverage or late fees, so updating these details is crucial as part of your transition.

Step 5: Pause, review, and close out your old account

After all incoming and outgoing payments are rerouted to your new bank, it's prudent to wait a month or two before making the final transfer of funds and closing your old account. This waiting period allows you to ensure that there are no lingering autopays or delayed transactions that could cause overdrafts or missed payments once the account is closed.

Once you're certain that all pending transactions have cleared and there are no outstanding payments due, transfer the remaining funds from your old account. Contact your old bank to understand the process for account closure. Some banks require a written request, while others may allow you to close accounts online or over the phone. Inquire about any closing fees and ensure that you receive written confirmation that your account has been closed to avoid any future issues.

Conclusion

Changing banks is a significant financial decision and can seem overwhelming at first. However, by following these structured steps, you can ensure a seamless transition. With a bit of planning and attention to detail, you’ll be up and running with your new bank account in no time.

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About Crew

Crew is a banking app for families. Crew provides high interest joint accounts for parents and kids, and supports allowances and safe spending for kids. Learn more at trycrew.com.