How to Switch Banks in 4 Quick Steps

There are a lot of reasons to switch to a different bank or financial institution. Between the fees, balance requirements, unsympathetic customer service representatives, and sometimes questionable business practices, you can probably find something that rubs you the wrong way about your bank.

Yet, people seem reluctant to close their accounts and take their business elsewhere. Why not switch?

It turns out that people like to stick with what they know. The average U.S. consumer has used the same checking account for 16 years, according to industry data.

If you have more than one account, there’s also the hassle factor of switching everything over to a new financial institution. So, changing banks is no small task. Many people think it’s a long, drawn-out process, and would rather keep their money parked where it is, even if it means paying more in fees and earning next to nothing in interest on their holdings.

But breaking up with your bank can be a relatively simple process. In fact, you can “ghost” your bank, just as you might a clingy Tinder match.

Here’s how to do it.

1. Find a new bank, and open an account

When looking for a new bank, consider your needs: For example, you may not require a physical branch at all, and you probably want to pay few or, even better, no fees. If that’s the case, you may want to check out online-only banks that typically have no fees, and that can offer higher yields on basic accounts. Or, you can look into smaller banks or local credit unions to see what services they offer.

Once you’ve chosen a new institution, your next step is to open a standard bank account (i.e., checking or savings account), and make an initial deposit.

Note: How much you’ll need for that initial deposit will vary, and some banks will charge you minimum balance fees if you don’t meet a certain threshold.

Voila! The hard part is done.

2. Start depositing into your new account.

Next, start using your new bank account to make regular deposits from your paycheck, and to conduct bill payment and other transactions. If you have direct deposit set up at your old bank, have it rerouted to your new account so that it becomes your primary, day-to-day spending account.

Also, if you have other checking or savings accounts at your old bank, open up accounts at your new institution to take their place.

3. Let your old account wither on the vine

By now, you should be using your new bank almost exclusively. Your paychecks are being deposited at your new bank, and your old accounts (though they might still have money in them) are effectively collecting cobwebs.

At this point, you should have rerouted any other direct deposits you have set up at your old bank—such as brokerage accounts, retirement accounts, etc.—to your new one.

4. Close your old accounts

There’s only one thing left to do: Break it off with your old bank by withdrawing any money you have left and closing your old accounts. The degree of difficulty in closing your old accounts will vary from institution to institution—some will likely let you do it all online, while some will require a phone call. You can also go into a branch and cut the cord in person.

Something else to keep in mind: If you have joint accounts, you’ll need to get the other account holders on board, too.

And your old bank probably won’t let you off the hook easily. They’ll probably ask why you’re closing your accounts, and where you’re taking your business. Although it may not be apparent, banks are in a battle for your business and they want to keep your deposits. Remember: You don’t have to give them an answer.

You can always just say that you plan to move underground, into an old missile silo, where a currency isn’t needed.

You can reserve your spot for the Stash debit account today.

If you aren’t a Stash investor already, you will need to download the app and register for a Stash Invest account. Then you will need to sign up on the waitlist to apply for a Stash Debit Account. Account Opening for Banking is subject to Green Dot Bank’s approval.