How to Change Banks: My Changing Banks Checklist

This photo shows a closeup of George Washington's image on the US $1 bill

If you follow my blog or my social media accounts, you’re aware that I recently changed banks. The process took me five months and I ended up paying about $50 in fees to do it. (I originally thought I paid $75 in fees, but one fee ended up getting refunded. Anyway, I digress…) Given that the whole point of this exercise was to stop giving money to my old bank, I found ponying up for these fees incredibly frustrating.

Looking back, I realize that, despite careful research, I made several mistakes along the way—expensive mistakes. Mistakes and unnecessary transactions come with fees attached, and the system is designed for consumers to make lots of mistakes.

Think about it: The changing banks process is already arduous enough. Add in a few fees, and you may get frustrated, angry, discouraged, and/or apathetic. (I’m guilty of the first three.) Worse yet, you may stay put or stop the changing banks process altogether.

Don’t! Persist and move your money to a bank or credit union that better aligns with your values. I’m here to share my experiences, step by step, so you don’t make the same mistakes I did.

Here’s my changing banks checklist so you can avoid fees, spend less time in the process, and preserve your sanity.

The Changing Banks Checklist

  1. Do your research and select a bank that aligns with your values.
  2. Open new accounts at your new bank.
  3. Activate your new debit/ATM card (if applicable) and order checks.
  4. Switch your paycheck direct deposit (if applicable) to your new bank.
  5. See if there are any fees to transfer funds from your old bank to your new bank, and make a plan to deposit/transfer money to minimize what you’ll pay in fees.
  6. Also consider the amount of time it takes for the transfers themselves in your plan to avoid fees (e.g., my old bank charged $3 for a three-day transfer; deposited checks were free and typically took a day or two to clear).
  7. Make a list of all your bills and services that were paid from your old account, including utilities, credit cards, magazine subscriptions, insurance payments, retirement savings, recurring donations, smartphone apps, etc.
  8. Once you have sufficient funds in your new account and/or a few paychecks have been deposited, go through your list of bills and services, one by one, and change each autopayment and/or electronic billing information over to your new bank account.
  9. Monitor your new and old accounts for approximately a month or two to make sure everything is migrating over as expected. Are your paychecks getting deposited to your new account? Are your recurring payments getting taken out of your new account? Are there any straggler bills or services getting paid from your old account? (If so, switch those over ASAP.)
  10. You’re almost ready to migrate everything over—but before doing so, double-check all old bills to make sure they’re set up with your new account, including the next scheduled payment. (I missed one auto pay bill and overdrew my account, leading to a hefty overdraft fee and having to scramble to transfer money back, which sucked.)
  11. When you’re confident you’ve covered all your bases, transfer the majority of your money from your old account to your new account, leaving enough funds to cover required minimum balances (if applicable) to avoid any fees.
  12. When this last transfer clears, call or make an appointment at your old bank to close your account.
  13. Close your account, request a cashier’s check or cash for any remaining funds from your old account, and deposit that in your new account.
  14. Shred your old debit card.
  15. Celebrate! You’ve successfully navigated an incredibly arduous process and migrated your money to a bank that supports your values. (I, for one, treated myself to a honey-dipped doughnut from Mariposa Bakery.)

A final thought: At first, I avoided many in-person conversations because I thought I could save time and money by doing things over the phone or online. Then, after receiving conflicting advice between my old bank’s customer service reps and the website experience—and paying fees for it—I ultimately decided to make an appointment and wrap everything up in person. The in-person meeting took all of 10 minutes and was actually the most pleasant, fee-free, and efficient interaction with my old bank.

(Yes, based on that last exchange, the irony of my new bank being all-online is not lost on me. However, from my experience thus far, they have outstanding customer service.)

Have you changed banks? Which steps did you take to do it? Share your expertise by leaving a comment!

Photo courtesy Rafael Gonzalez via Flickr Creative Commons

Why We’re Changing Banks, and How We’re Doing It

This photo shows a pile of cash with a $20 bill on top

I didn’t start out as a Bank of America customer. I moved to Boston in 2000 and needed a local bank. Fleet was close to my apartment, so I went with them. (Don’t judge. I was young and convenience trumped all.) Within a few years, Bank of America gobbled up Fleet. And because of apathy, I didn’t change, just accepted it—even though the fees were high. Even though customer service wasn’t great. Even though the interest was piddling. Their website worked, I liked their app, so fine. Laziness won.

Then I saw this article from Food and Water Watch showing which banks were subsidizing the Dakota Access Pipeline. Oh hi, Bank of America, to the tune of $350 million dollars.

Then Election 2016 happened, and I didn’t want my money to continue passively supporting policies that didn’t align with my values.

My husband and I, after nearly 14 years together, had never combined bank accounts, but it was something we had discussed doing “at some point.” (See above re: laziness.) He was a Citizens Bank customer. We checked the DAPL funding site. Oh hi, Citizens Bank to the tune of $72 million dollars.

So it was time—time for us both to change banks, and while we were at it, combine accounts. We started researching new banks, based on the following criteria:

  1. Is the new bank active in the local community and/or have a community/labor-friendly history?
  2. Did the new bank have a good record of corporate responsibility?
  3. Did the new bank have a strong Texas Ratio?
  4. Did the new bank charge minimal fees?
  5. Did the new bank have a decent customer service record?

Based on those criteria, we narrowed our choices down to five banks—three national banks with strong digital offerings, and two local entities (one community bank and one local credit union).

Each was then evaluated on the five questions above, and from there, we had two finalists: Winter Hill Community Bank (in our neighborhood) and Ally bank (online only).

Winter Hill got great ratings for community involvement, local development, and overall fiscal health. It got poor marks for customer service. It only had three locations in our neighborhood, and charged a fee for using other banks’ ATMs.

Ally got decent ratings for corporate responsibility, and high marks for customer service. It offered slightly better rates for its accounts, and free ATMs through their network. If customers go out of network, there’s a fee, but Ally refunds up to $10/month in fees.

All things weighed, we opted to go with Ally and to use our Ally ATM cards at Winter Hill Bank whenever possible, so they’ll benefit from any applicable fees.

We’re in the final stages of making the switch now, with all the headaches that changing banks entails. But in the long run, I’m glad to be putting our money where our values are.

Photo courtesy Ed Ivanushkin via Flickr Creative Commons