How to Change Banks When You Move – Choosing the Best Bank for Your Needs

Changing banks sounds like a lot of work, and it can be. But sometimes switching banks (or credit unions) is a good idea.

It’s a good idea to periodically reevaluate your banking needs. Opening a new bank account can add convenience to your life, help you save a ton of money by avoiding unnecessary bank fees, earn higher interest rates on your savings, and even save money on your ATM transactions.

You may even be able to score a big sign up bonus for opening a new account. The benefits can be substantial.

Let’s look at some factors to when considering changing banks, including deciding if you need to switch banks, how to find the best bank account for your needs, and how to actually switch to a new bank if you decide it’s necessary.

Knowing When to Switch Bank Accounts

Sometimes you just know you need a new bank account. You could be a rate chaser, going after the highest interest rates, or you may have relocated to a new area and you need a bank with a local presence.

Sometimes you just aren’t satisfied with your current bank’s offerings. This section will help you know when it’s time to switch banks.

You probably don’t need a new bank account if the following are true:

• Your bank offers access to all the types of accounts you need
• You aren’t paying any banking fees
• You have access to free (or reimbursed) ATM transactions
• You’re earning a decent interest rate on your savings
• The branch locations are convenient to your home or place of work

1. Does Your Current Bank Meet All Your Needs?

Is your current banking setup working for you? This could include location, number of branches or ATMs, account types and features, availability of mortgages, loans, or credit cards, and additional products and services.

You should also consider the location of the physical branch if that is important to you. Is it convenient to your home or place of work? Are their branches in your new location if you recently moved?

2. Are You Paying Too Much in Fees?

Download your last few bank statements and review them for fees such as ATM fees, monthly account fees, overdraft fees, or other avoidable fees.

Many of the larger banks charge monthly maintenance fees unless you maintain a certain minimum balance. Many also charge for checking accounts.

You should avoid paying banking fees whenever possible. There are plenty of free banking options that should meet your needs. We’ll show you how to compare banks in a moment.

3. Are You Earning Competitive Interest Rates on Your Savings Accounts or CDs?

The interest rates your savings earn are important. Many large national banks only offer interest rates slightly above 0%.

For example, one major bank only offers 0.05%, which will earn you a whopping $5.00 interest over the course of a year on a $10,000 deposit. A bank offering a more competitive 1.5% interest rate would earn you $150.00 over the course of the same year.

As you can see, interest rates matter a lot, especially if you are setting aside money for a medium to long-term savings goal, or for emergency funds.

You can compare interest rates on these pages:

• Best Savings Account Interest Rates
• Best CD Rates

4. Do You Need a Bank with a Physical Presence?

Many people, myself included, still find it helpful to visit a local branch from time to time. I don’t often need to visit a physical branch.

However, there are times when I need to either deposit a check that is larger than the online check deposit feature will allow, or there are times when I may need to make a cash transaction at the bank.

That said, online banking has come a long way in the last ten years. I do the vast majority of my banking online, and only occasionally visit a bank branch.

It is becoming easier than ever to take care of the majority of personal banking needs online.

Many employers either offer or require a direct deposit for paychecks, and most banks now offer mobile apps which make it easy to remotely deposit checks and take care of other banking needs.

Many people are finding they can take care of all of their banking needs online.

How to Choose a New Bank

There are hundreds of banks and credit unions from which to choose. You can make the process much easier on yourself by setting some quick criteria to help you eliminate much of the noise.

1. Determine Your Banking Needs

Do you want an online-only bank or a brick-and-mortar bank? Do you need both a checking and savings account? What about other account types?

Are you open to having accounts at two or more banks? I’m a big proponent of simplifying finances whenever possible.

However, there are benefits to having more than one bank account. Personally, I maintain an account through a bank that offers a brick-and-mortar location for the rare times I need to visit a bank branch.

I also maintain an online bank account to take advantage of online benefits, such as no monthly fees, higher interest rates, remote check deposits, and other features.

I keep my emergency fund and other short-term cash savings in the online bank where it earns more interest than my other bank. This setup provides the best of both worlds.

Your answers here will help you eliminate a large portion of banks before you even consider them.

2. Factors to Consider When Comparing Banks

Here are some of the factors you should look for when switching bank accounts:

1. Federal Deposit Insurance for banks, or NCUA Insurance for credit unions
2. No Monthly Maintenance Fees
3. No Minimum Balance Requirement
4. Free ATM Access (or an extensive ATM Network or ATM Fee Reimbursements)
5. Online & Mobile Access
6. A Competitive Interest Rate
7. No Transaction Limitations (some banks still limit you to a certain number of transactions per month)

Again, these criteria will significantly reduce the field of banks you need to consider.

3. Find a New Bank or Credit Union – Comparing Accounts

Once you have determined your needs, you can start searching for a new bank or credit union. Some credit unions offer excellent benefits over other banks, so be sure to check availability in your area.

If a physical presence is your greatest consideration, then you should notice which banks have branches near you or your workplace. Convenience is important and can be a great reason to choose a bank.

But full-service websites and full-feature mobile apps have made many services redundant, and you may be better off choosing an online bank.

If that is the case, then it’s a good idea to start with the features that are most important to you, then read reviews on the banks to determine which one best meets your needs.

Most people considering online banks first look at interest rates, types of accounts, account features, the online website or mobile app, and similar features.

It shouldn’t take too long to see a couple of options rise to the top.

How to Switch Bank Accounts

Your bank account is often the center of your financial world. So you want to make sure you change bank accounts without missing a beat!

These tips can help you transfer to a new bank without missing any payments, bouncing checks, or getting hit with the dreaded overdraft fees.

This is especially important if you have a high level of automation with your finances.

1. Open Your New Bank Account

This is the obvious first step. Most bank accounts only require a small deposit to open an account. Some have no minimum deposit requirement, while others may be as little as $1.00 to $100.

You will want to store your new account number and routing number in a secure location because you will need it for setting up direct deposits and making money transfers while transferring your funds between accounts.

2. Transfer Funds and Set Up Direct Deposits and Automatic Payments

The next step is to seed your new bank account with enough money to start transferring over your automated payments.

I like to run most of my expenses through my credit cards, which I pay in full each month through an automatic payment directly from my primary checking account.

This ensures I never miss a credit card payment, and never pay any additional interest charges. I also rack up a lot of cash back bonuses and other credit card rewards.

Be careful to leave enough money in your old account to pay any outstanding checks, transfers or automated payments.

You may need to leave your old account open for a month or two while you close out all the outstanding payments, and to ensure your payments are now coming from your new account.

It’s also essential to set up direct deposit at this time to ensure that all new income is routed to your new bank. You should be able to set up your payroll check through your HR department.

You may need to set up additional direct deposits for any other payments you regularly receive, such as investment income, payroll, Social Security, or other government benefits, etc.

3. Close Your Old Bank Account

You can close your old bank account once you have confirmed your payments are functioning through your new account. I recommend reviewing several months of previous statements to ensure you haven’t missed anything.

This is especially important for semi-annual or annual payments such as insurance, homeowner’s or association fees, taxes, or similar irregular payments.

Verifying you have transferred everything to your new account can save you from onerous banking fees, including overdraft fees, insufficient funds fees, etc.

If it makes you feel more comfortable, you can leave a little money in your account to cover any possible expenses that pop up.

Just make sure to check in periodically to ensure you aren’t being dinged for monthly fees, inactivity fees, etc. If nothing unexpected pops up, you should be able to close the account after a few weeks or months.

Should You Change Banks When You Move?

I have moved several times, including several cross-country treks. I have kept the same primary bank for well over a decade, even though there are no local branches where I live.

I can deposit checks via a mobile app, by scanning them, or by mailing them. I also maintain another online savings account which is used strictly for long-term savings and for my emergency fund.

I don’t funnel any regular spending or payments through that account.

Given today’s technology, changing banks may not be necessary unless you want to.

And there are often good reasons, as listed above, such as fees, interest rates, branch availability, convenience, etc.

You May Also Need to Consider Business Accounts

Business accounts are an entirely different topic, so I will only touch on them in this article.

When I last moved, I had to open a local business checking account because there wasn’t a local branch for my previous business bank. I still receive enough checks that it makes sense to have a local business bank account.

I left my old business bank account open for several months while I transferred over the direct deposit payments, linked my business credit cards to my new bank account, and ensured everything was set up as I wanted it to be.

Then I was confident that I could close the old business account without impacting my business.

Many business checking and savings accounts are local or regional, so you may need to do some research to find an account that meets your needs.

I have previously used Chase Bank Business Checking and Capital One Spark Business, both of which offer a variety of accounts and services.

Though there are some great incentives out there right now for up to a free $250 just for opening a free Chase Checking account!

If you do feel like you want to change banks, online banking is a great option to go for if you are comfortable with that, check out the free checking account at Chase.

As always, do what works best for your situation!

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