How to Switch Banks: A Step-by-Step Guide

Switching banks doesn’t have to be a difficult process, and it may benefit your financial health. For instance, one reason you might make a change is to earn a more favorable interest rate or pay lower or no fees. Or you might get a sign-up bonus at a new financial institution. There might be other reasons to switch banks, such as finding one with branches or ATMs that are more convenient for your daily life or one that offers other financial services you are seeking.

While changing banks isn’t usually an instantaneous process, here are simple steps to follow to make the switch as quickly and easily as possible.

How to Switch Banks in 6 Steps

If you think changing banks is the right path for you, here are the six steps that can make it happen.

Step 1. Research and Find a New Bank

Identify the key benefits you want but currently don’t have and do an online search to compare options. Here are some points to consider as you evaluate options:

•   Interest rates earned on money on deposit. For instance, you might want to look for a high-yield savings account to help your money grow. These can offer several times the interest rate of standard savings accounts. Also, some checking accounts may pay interest, though many do not.

•   Minimum deposit and balance requirements: Certain accounts require you to open the account with a particular sum of money and/or keep an amount on deposit to earn a specific interest rate and/or avoid fees.

•   Fees assessed for accounts: There can be various fees that can eat away at your money, such as monthly maintenance fees, overdraft and NSF (nonsufficient funds) fees, out-of-network fees, and more.

•   Convenience: If you want a traditional vs. online bank, make sure the branches are near your home and work. Also, if you use ATMs often, check to make sure in-network machines are easily accessible. If you travel frequently, look at the reach of the financial institution’s network.

•   Customer service: Read reputable online reviews and check availability (24/7? Only on weekdays?) for customer support.

•   Financial services: If you are planning to buy a home soon, you might want to bank with an institution that also offers mortgages to streamline that process. Or you might prefer a bank where you can access personal financial and investing services. Consider your needs carefully.

Step 2: Open a New Account

Found a new home for your cash? You can open your new bank account to get started. You can typically fill out the information needed online, in the bank’s app, or (with traditional banks) in person. Here’s what you will usually need:

•   Valid ID: This typically means government-issued photo identification, such as your state driver’s license or a passport. Other forms of ID may be accepted. When opening an account online, you may be asked for such details as your name, Social Security number, and birth date, with an image of your ID needing to be uploaded on the spot or in the future. (Worth noting: You usually must be at least age 18 to open your own bank account.)

•   Contact information: This means your address, phone number, and email address will likely need to be provided.

•   An opening deposit: Some banks will allow you to open an account with no money at first (say, you might sign up to have your paychecks direct-deposited going forward), while others will require you to make a deposit of anywhere from $1, $25, $100, or more to open your bank account. If you are signing up for a premium checking account or high-yield savings account, there may be higher minimums involved.

Now that you know what’s needed to open a bank account, don’t overlook this important point: You typically don’t immediately want to move every last cent out of your old account into the new account, though you may be tempted to do so to feel as if you are making progress. You may have pending transactions and autopays coming up that will take time to sort out.

Recommended: Interest APY Calculator

Step 3: Make a List of Automatic Payments and Direct Deposits

One important step when changing bank accounts is to review any automated payments or deposits that might be set up with your older account. There are a number of pros of automatic payments, which allow various bills and subscriptions to be seamlessly deducted from your primary account on their due date.

When you switch banks, however, you need to turn off or redirect every automatic payment that currently comes out of the account you wish to close to avoid falling behind on bills or accidentally getting your streaming service suspended. As you plan to make the switch, here are items you should keep track of:

•   Automatic payments: Take a careful look at which payments are made automatically from your bank account, such as mortgage, utilities, student loans, and more.

•   Recurring payments: Consider what subscription payments you have automatically coming out of your checking account, such as yoga studio memberships or streaming services

•   Recurring outgoing transfers: Look for payments that move to external accounts, such as funds being funneled into a retirement account or a health savings account.

•   Automatic deposits: This might include the direct deposit of paychecks, alimony, Social Security benefits, a tax refund, and other sources of income (such as payouts via P2P transfers, such as PayPal or Venmo for a side hustle).

Take a look at your monthly account statement and make a list of every automatic deduction. Also scan for any irregular automatic deductions (perhaps a quarterly insurance premium payment?). Once you’ve made your list, log in to each of your service provider accounts and change your payment information.

Step 4: Transfer Funds and Update Automatic Payments

You may have already made an opening deposit to your new account, but if not, now it’s time to transfer some funds from your old one to the new one.

It’s often possible to do this online. You can check with both banks involved to determine how to transfer the funds. (Keep in mind, you’ll often need to leave a bit of cash in your soon-to-be former account to cover any pending transactions and miscellaneous charges or fees.)

You’ll also want to update any automatic payments you typically receive. This can involve contacting your job’s human resources (HR) team about changing your direct deposit details or contacting Social Security about how to redirect your benefits.

Recommended: 7 Tips for Managing Your Money Better

Step 5: Monitor Pending Transactions

After you’ve canceled or rerouted all the automatic payments that deduct from the account you want to close, you will need to wait for any pending transactions to clear. These pending transactions are usually for bills or subscriptions that have one remaining payment left before the company can change your payment information. Or it could require an extra pay cycle for your salary to go into your account by direct deposit.

Waiting for all pending transactions to clear ensures that your bills will be paid and your subscriptions will continue without facing any overdraft fees. Make sure there is enough money in the account you wish to close to cover any pending payments. Otherwise, you risk incurring overdraft or NSF fees.

Step 6: Close Your Old Bank Account

Once you have transferred all automatic payments and possible deposits and waited a cycle for those to update, you’re done. It’s time to close your old account.

•   Depending on where it’s held, you may be able to finalize this online or by phone. In other cases (usually at smaller local banks or credit unions), you may have to send a written request or turn up in person.

•   Be sure to transfer out any remaining funds or get a check for the amount left in the account.

•   Whether you close your account online or in person, it’s a good idea to request written confirmation that the account has been closed. This is a safety-net move to protect you if some issue were to arise. When you receive the letter confirming your bank account is closed, make sure to save it somewhere safe for future reference.

You’re done! You’ve completed the process and switched banks.

Challenges and Considerations When Switching Banks

There are many good reasons to switch banks, but there are times when changing banks may not be worthwhile. So before diving in, think about the following:

•   If you are switching banks to get a sign-up bonus or short-lived perk, is it worth the trouble? Make sure that the amount of money you will gain is worth the effort and that you won’t be hit with fees that negate the extra money you bring in.

•   Check if the new account will require a hard credit inquiry to gain approval. Typically, financial institutions only do a soft pull, but if you are focused on maintaining or building your credit score, you should make sure.

•   Take extra care in tracking your automatic payments and deposits. It’s not uncommon to have more of these electronic financial transactions than you expect, and some can be infrequent or irregular, such as an annual payment of a subscription or insurance premium. Forgetting to redirect payments or direct deposits can create a hassle down the road.

The Takeaway

As the personal banking market becomes ever more competitive, you may find yourself thinking about changing banks for the sake of better services, greater convenience, lower fees, higher interest rates, or other features. If you do find a new home for your money, it generally takes just six steps to make the switch. It’s a bit of effort, but the payoff can be well worth it.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Are there downsides to switching banks?

If you’re wondering about cons or how hard it is to switch banks, know that changing banks requires just a bit of effort and patience. You will need to complete some forms and move any automatic payments or deposits to your new account, as well as wait a cycle while these update. But changing financial institutions should not involve a charge or impact your credit score.

Is it difficult to switch banks?

To switch banks, you’ll need to identify a new financial institution and fund your new account. Then you will need to transfer automatic payments and deposits (say, via direct deposit or PayPal) and wait for them to update, as well as ensure any final payments made from the old account are cleared. Once that happens, you are ready to transfer any remaining funds and officially close your old account.

What is the easiest way to switch banks?

A simple way to switch banks can be to identify a new financial institution, complete your application, and monitor and redirect automatic deposits and payments. Then wait a billing cycle (or sometimes longer) to ensure any final payments are made. At that point, you can transfer any remaining funds and close your old account.

How long does it take to switch banks?

While it can take just a few minutes to open a new bank account, it’s usually wise to wait a full billing cycle or two so that automatic payments and deposits can be transferred to your new account. Once that happens, you can feel confident in closing your old account.

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q326-020