Open a new account
Once you've chosen your new bank, the next step is opening a new checking account. Unless the institution you've chosen is an online bank, open the account in person, says Viveca Ware, executive vice president of regulatory policy for the Independent Community Bankers of America.
"It's much easier to get advice in person than it is over the phone," Ware says.
If you haven't opened a new bank account in a while, you may be surprised at the list of documents and info you'll need to bring, thanks to provisions of the Patriot Act.
Here's a list of what you'll need:
- Your name, address and date of birth.
- Official photo identification, such as a driver's license, state ID or passport. If you can't provide any of these, some banks will take two forms of official nonpicture ID, such as a Social Security card or a birth certificate.
- Your Social Security number.
- An opening deposit in the form of cash, check or payment information, including account number and nine-digit routing number, for an existing bank account with a balance big enough to cover the amount.
That last part is key; the amount of money you'll need to start a checking account can vary greatly. Bankrate's 2012 Checking Account Survey found the average minimum deposit needed to open an interest-bearing checking account was $507. The average minimum to open a noninterest checking account, $74, was much lower.
Switch over direct deposits and bill pay
There's a reason banks encourage account holders to sign up for direct deposit and bill pay besides the fact that it's cheaper for them to process transactions this way instead of receiving and issuing payments via paper checks, banking consultant Soifer says.
"Banks love those services because they make it that much harder for customers to switch out," he says.
Fortunately, switching those services over to your new bank just takes a little bit of paperwork and good timing, says Ware of the Independent Community Bankers of America.
First, you'll want to cancel any automatic bill payments scheduled at your old institution, to prevent those payments from overdrawing your old checking account, she says.
Then, arrange to switch your direct deposit to the new account with your employer's human resources department, Ware says. You might need to bring in a canceled check from your new account, but your new account number and routing number may suffice.
After doing that, it's time to start rescheduling automatic bill payments from your new account. Keep in mind that if you've authorized a particular vendor to automatically charge monthly payments to your debit card, you'll need to give them your new debit information to prevent an overdraft or late payment.
Ware says these steps should be taken in a short time frame to prevent double payments.
Close the old checking account
Now it's time to bid a fond (or not-so-fond) farewell to your old account. Ware recommends doing this in person, if possible. That way you'll walk away with proof your account is closed and the bank won't attempt to tack on charges later or report you to ChexSystems for unpaid items.
You'll want to be sure all checks written from the account have cleared before taking out the last of your cash, Ware says.
If your account is closed when those checks attempt to clear, they'll bounce, potentially damaging your relationship with whomever the check was written for or incurring late-payment fees.
"Everyone is inconvenienced, both the check writer and the check recipient," Ware says.
To find out whether your checks have cleared, you can compare your check register against your online statement. Alternatively, Ware says you can call the parties you wrote checks to in order to verify they've cashed them.
To put the finishing touches on your checking account transition, shred all the checks and debit cards that came with your old account to prevent them from being used by identity thieves, Ware says.