When you’re moving, you probably have a pretty long checklist. It might include donating belongings you no longer use to avoid transporting them, transferring schools and health records for your children to new schools and doctors, scheduling to have your utilities shut off at the old place and then turned on at the new one, and … well, it’s a long list.
Should you also switch your bank?
It depends. This post will walk you through when you may want to change your financial institution and when it may make sense to stick with your current one.
You may also want to wait until after you move before deciding to switch—and, if it’s a “yes,” before choosing your new bank—so you can get settled in first.
But how do you efficiently switch? What about online-only banks? What’s the difference between online banking and online-only banking?
Keeping Your Current Bank
If you love your current bank, and it’ll still be convenient to use post-move—and it allows you to get the most out of your money—then it could be a good idea to stick with your current account. That said, if your account is at a traditional bank, you might want to consider the pros and cons of online-only banking, which we’ll discuss later.
Making the Switch
If you’re unhappy with the financial institution you currently have, then your move may be the impetus for finding one that better suits your needs. Perhaps, as just one example, the bank you have charges a lot of fees.
It’s possible that you’re not necessarily unhappy with your bank, but you’re not all that happy, either. Again, your upcoming move could provide the momentum you need to find something that fits your lifestyle and needs.
As another example, you may decide to switch banks if the one you’ve been using doesn’t have a branch in your new hometown.
Overall, it can make sense to switch banks to make a fresh start, to create a more convenient situation for yourself, and/or to find a financial institution that helps your money to work harder for you.
Exploring a New Bank
If you’re making the switch—or considering the idea—there’s likely a bank out there that fits your needs. Checking out multiple banks? Consider making a comparison chart to ensure you’re getting the most for your money. Overwhelmed by all the jargon and marketing? Here are some specific questions to ask.
Issues to explore include:
• Fees: Banks can charge monthly service fees, yearly maintenance fees, overdraft protection fees, ATM charges, fees when your balance goes below a certain amount, and more. Reading the terms and conditions, and estimating how much the fees might cut into your budget and financial growth could prove helpful.
• Interest rates: Many savings accounts today have very low interest rates, while others—especially online-only banking choices—can offer more attractive options. If you find a better interest rate, paying attention to whether you’ll need to maintain a certain balance can help you enjoy the higher rate.
• Location: How often do you visit a branch? Use an ATM? If you like to visit a branch regularly, then discovering which banks are near you may be one of the deciding factors. Does it have a fee-free debit card for you to use?
• Digital banking: What options are available for you to use at each bank? How easy is each app to use? Can you make deposits with your smartphone? Can you link your accounts with other banks? Consider reading reviews of apps that interest you to hear other people’s experiences.
• Investment opportunities: If you’re interested in investing, you might want to consider financial institutions that provide that option. Having all your accounts in one place could add convenience to your life.
As you make your comparison chart, reading the fine print, including whether or not a bank is FDIC-insured, could prove essential. That federal insurance is important to protect your money.
Switching Banks When Moving
Some steps to take when switching banks:
• Opening the new account but don’t close the old one yet.
• Making a list of direct deposits going into your account. Do you need to talk to your employer about rerouting paychecks to the new account? Are there any other deposits coming in? Switch those.
• Listing all automatic payments coming out of that account. Log in to each account to change your payment information. If there are any that you can’t switch to your new account quite yet, make sure to manually make payments so you don’t fall behind.
• Waiting for any pending transactions to clear your old bank. Give yourself enough time to ensure all has cleared.
• Closing your old bank account.
• Transferring remaining funds to your new account.
Note that, if the old bank charges monthly service fees, you’ll need to keep enough in the account to cover those charges while transactions are clearing. Otherwise, the service charge may go through first, possibly causing a check to bounce.
SoFi Money doesn’t charge any account
fees. Set up direct deposit today.
Pros and Cons of Online-Only Banking
First, what we’re talking about here is online-only banking. Many traditional banks and credit unions offer mobile services, such as looking up balances online or depositing checks and transferring funds. They offer online supplements to services provided in their physical branches.
With online-only banking, though, there is no physical branch. Some people don’t feel comfortable with that (especially since there may not be live assistance from a personal banker) but many others appreciate the benefits.
For instance, with no brick-and-mortar locations, overhead costs are lower, meaning the institution may be able to offer higher interest rates on savings accounts, and other perks.
Some online-only banks will limit how many monthly transactions you can make. Some require minimum balances, like traditional financial institutions often do.
Online-only banking can be quite convenient, with services available 24/7/365, which can be especially ideal for busy people and for those who work odd hours.
Many online-only banks provide ATM services for free or refund ATM fees up to a certain amount each month.
Here’s another benefit to online-only banking. Once you have this type of account, switching banks when moving can be taken off your lengthy to-do list, because you can bank wherever you are with your smartphone.
Some online-only financial institutions offer savings accounts that are attractive, but don’t offer checking accounts. If so, note that you may be able to take advantage of high interest savings options at online banks and get a checking account at a traditional bank. You don’t have to keep all of your money in the same institution.
Or, you might consider SoFi Money®, a hybrid account that combines the best of savings and checking, all in one.
SoFi Money is a cash management account where you can spend and save, earning you interest up to 0.20% APY (annual percentage yield) on all your cash (subject to change), allowing you to get even more bang for your buck.
For fun, here is just a partial list of the fees we DON’T charge:
• $0 minimum account fees
• $0 overdraft fees (compared to an average of $38 per transaction)
• $0 transaction fees; use any ATM, worldwide, that accepts Mastercard® and we’ll reimburse you the charges
• $0 foreign transaction fees
• $0 no account opening fees
• $0 bill pay fees
• $0 mobile check deposit fees
• $0 return item fees
SoFi Money holders also get access to exclusive member benefits and much more, all at no additional cost.
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SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates is a bank.