How many of you dislike your everyday bank? You’re getting hit with stupid fees, or perhaps you simply do not find them helpful anymore. Maybe, you recognize your brick-and-mortar bank’s savings account is paying dirt, while other online banks pay substantially more. What about the fact that it is a tiny local bank with no online capabilities? Whatever the reason I run into this situation all the time – people fed up with their bank, but not quite sure the steps to take in firing them.
Now, I certainly can sympathize as the task seems daunting, to say the least. Perhaps, you have had this bank since the year of the flood when you deposited your paper route money into it. Or is the teller a friendly face that you may enjoy seeing every other week. Regardless, if you are at the point where you know it is time for a change, you have come to the right place.
OK, for this little exercise I will run through my step-by-step plan on how to fire your bank and open a new bank account.
How to Switch Banks: A 9 Step Plan to Firing Your Bank
The first step is simple and easy. Do your research as to what you are looking for in an everyday bank. Is it convenience? Online capabilities? Top savings rates? Least amount of fees? Better hours? You name it, but do yourself a favor and do some real researching. The process of switching is not one you will want to do that often.
One bank or two? I personally use two banks as I use a brick-and-mortar bank for my checking account needs. I then attach that checking account to a high yield savings account for the best rates on my savings dollars. The reality is most online banks pay a substantially higher rate than your traditional stand-alone bank.
Connect your new primary bank electronically to your online savings bank, if you are using two like me, and/or your old bank you are leaving assuming they have the capabilities. This will make your transition so much easier through the process.
Now comes the fun part (sarcastic tone). Go online and download every one of your statements for the past year, fun right. Then look at all deposits in and withdrawals out month by month. Start a log on a piece of paper that states each institution’s automatic withdrawals and deposits each month.
For instance, if I looked at mine, I would see 3 credit card bills paid each month, car payment, utility company, and mortgage to name a few. However, the importance to doing this for a year is that many of these vendors are not a monthly draw, i.e., my EZpass. After you spend about 20 minutes doing this, you will have a nice list of most places you need to update.
Now that you have your detailed list it is time to go into your new checking account and start adding these automatic payments. Remember, some of these you will add through the new bank’s site, and others you will have to update at the end companies’ site like your credit cards.
Make sure you write down your new account routing and account number which will make this tedious task go much quicker. In addition, money is coming in somewhere and you will want to update that information as well. It could be your employer, your investment accounts, or even Social Security Administration. The important thing here is to do this all at once and be as thorough as you can be.
If you are like me, you have a ton of saved addresses and names in your bank account that you can send an online check to. Make sure you capture all their info from your old bank and transfer that into the bill pay section of your new account.
Make sure you have enough money in both your new account to get it off the ground, and additionally leave enough money in your old account to capture any places you inadvertently missed. Last thing you want is to not have sufficient funds to capture your needs. Oh, and be conscious of minimums in these accounts as most banks require some minimal balance to avoid superfluous fees.
Keep an eye on these accounts each month for about a year. Now, I am being a bit overkill here, but checking your old account, especially on a regular basis can help you stay on top of any providers you may have missed.
The time has finally come to waive farewell to your old bank. You can walk in to say goodbye to your favorite teller or simply call them on the phone to ask them to close your account and send you any remaining funds. This can be liberating and will start the new chapter in your banking future.
Bonus – Step Ten
Well, there really is not a step ten except go enjoy your banking freedom. You do not have to feel stuck working with a bank that no longer meets your banking needs. I know the steps above seem somewhat daunting, but take solace in knowing this is not something you will be doing on a regular basis. Also, you are making this decision to put yourself, and family, in a better financial position. Let that be your guiding light through this fun transition and know on the backside you will be better off and in a more desirable financial situation.
As always stay wealthy, healthy, and happy.
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