Seamless Bank Switching: A Simple Guide to Financial Freedom

Changing to a new financial institution doesn't have to be a huge hassle.

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Many people open a bank account and stick with that account for years. This is a fine approach if the bank that holds your account treats you right. That means not charging you unnecessary fees, providing good customer service, and offering reasonable perks that most financial institutions provide. 

But if your bank isn't earning your business anymore, you should seriously consider switching to a financial institution that deserves your hard-earned cash. The only problem is, you may be reluctant to do this because changing your account over to a new bank can seem like a hassle.

If you follow these four steps, though, the process will be a whole lot easier and you won't have to fear making a shift to a new bank that's a better fit. 

1. Open your new bank account before closing your old one

Getting a new bank account set up takes time -- especially because a bank account is the foundation of most people's finances since it's where money is deposited and the source of funds used to pay bills and make purchases. 

You don't want to close your old account until you've alerted all of the companies currently interacting with it to switch over to your new one. That means you'll need to open the new account first. 

2. Look back over a year of past statements

Chances are good that you have automatic payments or money transfers set up from your current bank account. It can be easy to forget all of the different payments that you're making -- especially if some of them happen only annually or a few times per year.

You don't want any payments to fall through the cracks, nor do you want to have to spend tons of time tracking down details about who you owe money to and need to alert that you have a new bank account. 

To make sure you transition everything over, review a year's worth of statements from your current account and make a list of every payment that needs to be moved to your new account. 

3. Have a plan to fund your new account

You'll need to get money into your new account so you can make the transition to paying your bills from it. You can do this by changing your direct deposits from your employer so money is put into your new account when you get paid. 

You can also arrange to have a direct transfer of funds from your old account to your new one. It can be convenient to transfer money directly so you don't end up with unused funds in your old account -- but you want to make sure you don't move all the money over while you still have uncashed checks or bills coming out of the old account. 

4. Close your old account and get written confirmation

Finally, once you've switched all of your deposits and debits, you can close your old account. Be sure to get written confirmation you've done this so you aren't surprised by an account that accidentally remains open when you don't want it to. 

By following these four steps, it should be simple and straightforward to transition to a new bank account that's a better fit.