How To Transfer Your Bank Accounts

Quick answer

• Identify your new bank and account type.
• Gather necessary documents for account opening.
• Start a new account before closing your old one.
• Update automatic payments and direct deposits.
• Transfer funds from your old account to your new one.
• Monitor both accounts until the transition is complete.
• Close your old account once all funds and transactions are settled.

Who this is for

• Individuals looking for better interest rates or lower fees.
• People who are unhappy with their current bank’s service or features.
• Anyone consolidating accounts or simplifying their financial life.

What to check first (before you act)

Goal and timeline

Before you transfer your bank accounts, clearly define why you’re moving and when you want the process completed. Are you seeking higher interest rates, better mobile banking features, or a bank closer to home? Having a clear objective will help you choose the right new bank and account. Your timeline should be realistic, allowing enough time for all steps without rushing, which can lead to errors.

Current cash flow

Understand your typical monthly income and expenses. This includes regular bills, loan payments, and any income that is directly deposited. Knowing your cash flow patterns will help you ensure a smooth transition of direct deposits and automatic payments, preventing any missed payments or bounced checks.

Emergency fund or safety buffer

Ensure you have a sufficient emergency fund in place before you start the transfer process. Ideally, this fund should be in a separate, easily accessible account. This buffer is crucial in case of unexpected delays or issues during the account transfer, ensuring you have funds available for immediate needs.

Debt and interest rates

Review any outstanding debts, such as credit cards, personal loans, or mortgages, and their associated interest rates. While not directly part of the bank transfer, understanding your debt situation can influence your choice of a new bank, especially if you’re looking for options like debt consolidation or better savings rates to offset interest costs.

Credit impact

Understand how opening and closing bank accounts might affect your credit. While checking and savings accounts typically don’t impact your credit score directly, closing an account that has been open for a long time could have a minor effect on your credit utilization ratio or average age of accounts. It’s generally a minimal impact for deposit accounts.

Step-by-step (simple workflow)

1. Research and choose a new bank and account type

• What to do: Compare different banks (online, national, local credit unions) based on your needs for interest rates, fees, ATM access, online/mobile features, and customer service. Select the specific account type (e.g., high-yield savings, checking with no monthly fees).
• What “good” looks like: You’ve identified a bank and account that aligns with your financial goals and offers competitive terms.
• Common mistake: Choosing a bank solely based on introductory offers without considering ongoing fees or long-term value. Avoid this by reading the fine print and comparing all features.

2. Gather necessary documents

• What to do: Most banks will require at least two forms of identification (e.g., driver’s license, passport) and your Social Security number. You may also need proof of address (like a utility bill) and an initial deposit.
• What “good” looks like: You have all required documents ready before visiting a branch or starting an online application.
• Common mistake: Forgetting a required document, which delays account opening. Avoid this by checking the bank’s website or calling ahead for their specific requirements.

3. Open your new bank account

• What to do: Visit a branch or complete the online application process for your chosen bank and account. Provide all requested information and documents.
• What “good” looks like: Your new account is successfully opened, and you have your new account number and any associated debit cards or online banking credentials.
• Common mistake: Rushing through the application and making errors that could lead to account issues later. Avoid this by carefully reviewing all information before submitting.

4. Inform your employer and bill pay providers

• What to do: Notify your employer about your new bank account details for direct deposit. Update any recurring bill payments (utilities, subscriptions, loan payments) with your new account and routing numbers.
• What “good” looks like: All parties that send you money or take money from your account regularly have your new banking information.
• Common mistake: Forgetting to update a crucial bill payment or direct deposit, leading to late fees or bounced checks. Avoid this by creating a comprehensive list of all automatic transactions.

5. Transfer funds to your new account

• What to do: Initiate a transfer from your old bank account to your new one. This can often be done online through your new bank’s portal, your old bank’s portal, or by visiting a branch.
• What “good” looks like: The full balance from your old account is moved to your new account.
• Common mistake: Not transferring enough funds to cover immediate expenses or the minimum balance requirement at the new bank. Avoid this by confirming the total amount needed before initiating the transfer.

6. Update any automatic withdrawals or subscriptions

• What to do: Go through your statements and identify any other services that automatically withdraw funds from your old account (e.g., streaming services, gym memberships, investment platforms). Update these with your new account information.
• What “good” looks like: All automatic withdrawals are successfully linked to your new account.
• Common mistake: Missing a few recurring payments, resulting in service interruptions or late fees. Avoid this by thoroughly reviewing past statements for all automatic debits.

7. Monitor both accounts closely

• What to do: For at least a few weeks, keep a close eye on both your old and new bank accounts. Ensure all expected deposits have arrived and all automatic payments have cleared from the correct account.
• What “good” looks like: You see a clear pattern of transactions moving to your new account and no unexpected charges on your old one.
• Common mistake: Assuming the transfer is complete without verification, leading to missed transactions or overdrafts. Avoid this by dedicating time to review statements from both accounts daily or every few days.

8. Close your old bank account

• What to do: Once you are certain that all funds have been transferred, all checks have cleared, and all automatic transactions have been updated, contact your old bank to close the account. Ensure you get confirmation in writing.
• What “good” looks like: Your old account is officially closed with no outstanding issues or fees.
• Common mistake: Closing the account too soon, leading to issues with uncleared checks or returned direct deposits. Avoid this by waiting until at least one full statement cycle has passed since your last activity in the old account.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Not researching enough	Choosing a bank with hidden fees or poor service.	Thoroughly compare banks, read reviews, and understand all terms and conditions before committing.
Opening the new account too early	Delaying the transfer of funds and making the process more complex.	Open the new account, but keep funds in the old until ready to fully transition.
Forgetting to update direct deposits	Missed paychecks or delayed income, causing cash flow problems.	Create a checklist of all income sources and notify them immediately.
Not updating all automatic bill payments	Late fees, service interruptions, and negative impacts on credit.	List every recurring payment and update them systematically.
Transferring funds without a buffer	Inability to cover expenses if the transfer is delayed or incomplete.	Maintain a separate emergency fund and ensure enough cash is available in the old account to cover outstanding transactions until the new account is active.
Closing the old account prematurely	Returned checks, bounced payments, and potential fees from the old bank.	Wait until all checks have cleared and all automatic transactions have successfully debited from the new account.
Not checking for account closure fees	Unexpected charges when closing the old account.	Ask the old bank if there are any fees associated with closing the account, especially if it’s a newer account.
Ignoring minimum balance requirements	Monthly service fees at the new bank, eating into your savings.	Verify the minimum balance requirement for your new account and ensure your balance consistently meets it.
Not confirming the transfer of all funds	Shortage of funds in the new account for planned expenses.	Double-check the final balance in the old account against the balance in the new account.
Failing to update linked payment apps	Unpaid subscriptions or services that revert to old account details.	Review all apps and services linked to your bank account and update their payment information.

Decision rules (simple if/then)

• If your primary goal is to earn more interest on savings, then prioritize banks offering high-yield savings accounts because these accounts typically offer significantly better rates than traditional savings.
• If you frequently use ATMs, then choose a bank with a large, convenient ATM network or one that reimburses ATM fees because this will save you money and hassle.
• If you prefer in-person service, then consider a local credit union or a national bank with physical branches because online-only banks may not meet your needs for face-to-face assistance.
• If you are closing an account that has been open for a long time, then be aware that it might have a minor impact on your credit utilization or average age of accounts because these are factors in credit scoring.
• If you have many automatic payments, then create a detailed spreadsheet of all recurring transactions before you start because this will prevent missed payments and late fees.
• If you are moving a large sum of money, then inquire about transfer limits and potential fees from both banks because large transfers may have specific regulations or costs.
• If you expect direct deposits to continue immediately, then ensure your employer has your new bank details well in advance of your next payday because delays can cause significant financial inconvenience.
• If you are opening a joint account, then ensure both individuals understand the process and have the necessary documentation because joint accounts require cooperation.
• If you are unsure about a specific fee, then ask the bank representative for clarification because understanding all charges is crucial for managing your finances.
• If you encounter issues during the transfer, then contact customer service at both banks immediately because prompt communication can resolve problems faster.
• If your old bank has a minimum balance requirement, then ensure you transfer enough funds to meet this requirement in your new account to avoid unexpected fees.

FAQ

How long does it typically take to transfer bank accounts?

The entire process can take anywhere from a few days to a few weeks, depending on how quickly you update all automatic payments and direct deposits, and how long it takes for your old bank to close the account.

Can I have accounts at two banks at the same time?

Yes, you can maintain accounts at multiple banks simultaneously. This is often a good strategy during a transition period to ensure no disruption in funds.

What happens to my checks if I close my old account?

If you close your account before all outstanding checks have cleared, they may be returned unpaid, potentially incurring fees from the merchant and your old bank.

Will closing my old bank account hurt my credit score?

Typically, closing checking or savings accounts has little to no direct impact on your credit score because they are not credit-based products. However, closing a very old, established account might slightly affect the average age of your accounts.

What if my employer doesn’t support direct deposit to my new bank?

If direct deposit isn’t an option, you’ll need to arrange for paper checks and deposit them yourself into your new account. Be sure to confirm the process with your employer.

Are there fees for transferring money between banks?

Some banks may charge a fee for outgoing wire transfers. Electronic transfers (ACH) are usually free, but it’s best to check with both your old and new banks about any potential costs.

How do I handle automatic withdrawals from my old account?

You need to actively update the payment information with each service provider (e.g., utility companies, streaming services, loan providers) using your new bank account details.

What should I do if I find a mistake after closing my old account?

Contact your old bank immediately. If the mistake was due to their error, they should be able to rectify it. If it was an oversight on your part, they may have limited options, but it’s always worth asking.

What this page does NOT cover (and where to go next)

• Specific details about opening business bank accounts.
• How to transfer assets like stocks, bonds, or other investments.
• The process of closing a bank account due to a deceased individual’s estate.
• Detailed comparisons of specific bank products and their current rates.
• Strategies for managing multiple bank accounts for budgeting or savings goals.