A Complete Guide to Switching Banks

Are you considering switching banks? If so, you’re not alone. In recent years, more and more people have been making the switch from their current banking institution to another. Whether you’re looking to get better interest rates, better customer service, or simply a change of pace, switching banks is a great option.

Making the switch can feel like a daunting task and you may be unsure of where to start. Don’t worry - we’ve got you covered. In this guide, we’ll take you through the process of switching banks step-by-step. We’ll cover everything from researching potential banks and assessing their features to closing your current accounts and setting up new ones. Let’s get started with our guide for how to switch banks!

Reasons to Change from One Bank to Another

We all know that change can be difficult, especially with something that is a regular part of your life like your bank account. However, there are some very valid reasons to consider switching banks. Here are a few of the most common:

Better Interest Rates

If you’re looking to save money, switching banks could be a great way to do it. Many banks offer competitive interest rates on savings accounts, checking accounts, and other types of accounts.

Doing some research could help you find an account with a higher interest rate than your current one.

Better Customer Service

If you’re not happy with the level of customer service you’re currently receiving from your bank, it may be time to switch. Look for banks that have good customer reviews and a reputation for providing excellent customer service.

Convenience

If you’re looking for convenience, then switching banks might be a great option. Look for banks that offer features like mobile banking, remote check deposits, and ATMs in convenient locations. You could also consider banks that offer online banking, so you can access your funds from anywhere.

Better Security

Another great reason to switch banks is for better security. Look for banks that offer fraud protection, encryption technology, and other security features. This could help keep your funds safe and secure.

Essential Factors to Consider When Switching Banks

When switching banks, there are a few essential factors you should consider. Here are some of the most important ones:

Customer Service

Does the new bank make it easy to switch by providing helpful customer service? Are they available to answer your questions quickly and thoroughly?

Interest Rates and Fees

What type of interest rates and fees does the new bank offer? Are there any special offers or incentives for signing up?

Security

Does the new bank have strong security measures in place to protect your data and funds?

Does Changing Banks Affect Your Credit Score?

Switching banks typically doesn’t affect your credit score. The process is relatively simple and doesn’t involve any credit checks. However, depending on the type of account you’re opening, you may be required to provide a credit report or score.

Changing Banks When You Have a Loan

If you have a loan with your current bank, it’s important to consider how switching banks could impact it. You may be able to transfer the loan to the new bank, or you may need to pay it off before you can close the account. If you’re not sure what to do, it’s best to contact your current bank and the new bank to discuss your options.

Finding the Perfect Bank

To find the perfect bank for you, you'll need to consider each bank and their account offerings in-depth.

Features and Options

Start by looking at the features each account offers, from things as essential as

• Fees and minimum balance requirements
• Type of account (checking, savings, money market, etc.)
• Interest rates and any associated bonuses
• ATM/debit card availability
• Online and mobile banking options
• Customer service availability
• Security features and fraud protection

Opting for Accounts at Multiple Banks

You can also opt to open accounts at multiple banks. This may be a good option if you are looking for the best of both worlds - a checking account with one bank and a savings account with another. This could result in higher interest rates, lower fees, and more convenience. If you choose to go this route, try to make it as simple as possible to manage your accounts. Ideally, having all of your accounts with one bank will be much easier to manage, but if you really want to get the best rates and features, then having accounts at multiple banks may be the way to go.

The Account Opening Process

Once you’ve chosen the bank or banks you’d like to open accounts with, you’ll need to start the account opening process. This typically involves filling out an application and providing the necessary documents.

What You'll Need

You’ll need to provide the bank with proof of your identity and address, such as your driver’s license or passport, a utility bill or bank statement, and an initial deposit. You may also need to provide a Social Security number.

Transferring Funds to Your New Account

Once you’ve opened your new account, you’ll need to transfer funds from your old account to your new one. If your new bank offers an auto-transfer feature, this can be done quickly and easily. If not, then you’ll need to transfer the funds manually.

Credit Score is Usually Not Needed

Most banks don’t require a credit score to open an account. However, it’s important to note that if you decide to apply for a loan or credit card from the bank, they may require a credit check. Account features like overdraft protection also usually require a credit check.

Check Minimum Deposit Requirements

Make sure to check the minimum deposit requirements for each account you’re interested in. Some banks may require an initial deposit of $25 or more. Other banks may offer special incentives for setting up an account with a minimum balance.

List Out Subscriptions, Automatic Payments, Bills, Services, and Deposits From Your Old Bank

Before you close everything and leave your old bank, make sure to list out all the subscriptions, automatic payments, bills, services, and deposits that are associated with your current accounts. This will ensure that you don’t miss any payments or deposits. Typically, you can transfer your direct deposits and automatic payments to your new accounts by filling out the appropriate forms. If you’re unsure how to do this, you can always contact your old bank or the company which you’re receiving the payment from.

Making the Transition for Cash and Service Payments

Now that you know which payments and deposits need to be transferred, let's take a look at how you can transition those services and cash payments to your new account. Of course, you want to ensure your old account remains open during this process and that you make this switch in stages.

Keep Money in the Old Account

Some payments or checks may not have cleared yet when in the middle of the switching process. This could be due to the fact that the new bank may not have been updated on the payment information. To ensure you don’t miss out on any payments, it’s important to keep a small amount of money in the old account.

Switch Direct Deposit

If you receive a direct deposit from your employer or other source, you’ll need to update the information with the new bank. This is typically done by filling out a form and providing the updated information to your employer or the source of the deposit.

Automatic Payment Rescheduling

If you have any automatic payments set up with your current bank, you’ll need to reschedule them with your new bank. This can typically be done by filling out a form or updating the payment information with the company you’re paying.

Check the List for Any Forgotten Payments

Once you’ve switched the payments and deposits over to your new bank, make sure to check your list for any forgotten payments. This is an easy step to overlook but an important one nonetheless.

Closing Your Old Account

Once you’ve made the switch to your new bank, you’ll need to close your old account. This is usually done by filling out a form and sending it to the bank. Make sure to check with your bank to see what their process is. You may be able to do it over the phone, or a branch visit might be needed in some cases.

Switching Full-Time to Your New Account

Once you have taken care of the biggest steps, it’s time to switch full-time to your new account. This means gradually decreasing the amount of money in your old account until it is empty. Once you're sure you don't have any outstanding automatic payments or payments that will clear to your old account, close it completely and enjoy the benefits of your new bank account.

Frequently Asked Questions

Does switching banks affect my credit score?

No, switching banks typically does not affect your credit score. However, depending on the type of account you’re opening, you may be required to provide a credit report or score.

How long does it take to switch banks?

The amount of time it takes to switch banks will vary depending on the type of account you’re opening and the bank you’re switching to. Generally, the process should take no more than a week for even the most complex account structure.

Do I need to close my old account before opening a new one?

No, you don’t need to close your old account before opening a new one. However, if you’re looking to get the best rates and features, it’s usually a good idea to close your old account. This will ensure that you don’t get charged any fees on multiple accounts which can add up quickly.

How hard is it to switch banks while buying a house?

Switching banks while buying a house can be a bit complicated. It’s important to make sure that your new bank is able to provide the mortgage loan you’re looking for. You will also need to make sure that your credit score and other factors meet the bank’s requirements.

How hard is it to switch banks if you have bad credit?

Most bank accounts can be opened without performing a hard credit check. If you have bad credit, you may still be able to open an account with some banks. However, you may be required to provide additional documentation or proof of identity and income.

Ready to Make the Switch to FNCB Bank?

If you’re ready to make a switch to a bank account that works for you, check out FNCB Bank’s Switch Kit for information on switching today. We offer competitive interest rates, world-class security, and banking services to fit every need. Contact us today to learn more about our bank accounts and make the switch to FNCB Bank!