Why and when you might need to change banks
You change banks when you want to move your money to a different financial institution—whether that's another bank, a credit union, or an online bank. The reasons vary: you might be chasing better interest rates, lower fees, a branch closer to home, or simply better customer service. Some people switch because their employer changed payroll processors, or because they're moving to a state where their current bank has no branches.
The process itself is straightforward, but it requires planning because money doesn't move automatically. You have to tell your employer, your billers, and anyone else who sends you money where your new account is. If you don't update these sources, payments will keep going to your old account—and you'll have to ask your old bank to forward them or retrieve them manually.
Key Takeaways
- You must update your direct deposit with your employer and your automatic bill payments with each biller separately—your bank cannot do this for you.
- Open your new account before closing the old one, and keep the old account open for at least 30 days to catch any stray payments.
- Check your old account weekly for the first month after switching to catch payments that still arrive there.
- If you receive Social Security, disability, or veteran benefits, update your account information with the Social Security Administration or Veterans Affairs directly.
Opening a new account at your new bank
Start by opening the new account before you close the old one. You'll need a government-issued ID, proof of address (usually a recent utility bill or lease), and your Social Security number. Most banks let you open an account online in 10 to 15 minutes, though some still require an in-person visit.
Once the new account is open and you have the account number and routing number, write both down. You'll need them to set up direct deposit and to update your billers. The routing number is a nine-digit code that identifies your bank; the account number identifies your specific account within that bank. Your bank's website or a phone call to customer service will give you both if they're not in your welcome materials.
Updating your paycheck and regular deposits
Contact your employer's payroll department or HR office and ask them to change your direct deposit to your new account. You'll give them your new routing number and account number. This change usually takes effect on the next pay cycle, though some employers process changes only on certain dates—ask when yours will go through.
If you receive regular deposits from sources other than your employer—Social Security, disability benefits, veteran benefits, pension payments, or regular transfers from another person—you must update each one separately. Social Security and Veterans Affairs have their own online portals where you can change your bank information. For other regular deposits, contact the organization sending the money and ask how to update your account details.
Do not assume your bank will forward these payments to your new account. Most will not. If a payment arrives at your old account after you've closed it, the bank will return it to the sender, and you'll have to contact the sender to resubmit it.
Updating automatic bill payments and subscriptions
Go through your bills and subscriptions one by one and update your bank account information with each one. This includes utilities, insurance, phone, internet, streaming services, loan payments, credit card payments, and any other recurring charge. Log into each company's website or call their billing department and provide your new routing number and account number.
Do this before your old account closes, and do it at least a week before the next payment is due. If you update a payment just days before it's scheduled to process, the system may not have time to register the change, and the payment could still pull from your old account. Some companies take 5 to 10 business days to process account changes.
Keep a list of every company you've updated as you go. This serves as a checklist and a record if something goes wrong. When you're done, review the list to make sure you haven't missed anything.
Transferring your remaining balance
Once your direct deposits and automatic payments have moved to the new account, transfer any remaining balance from your old account to your new one. You can do this through your bank's online portal, mobile app, or by visiting a branch. Most banks let you transfer between accounts at different banks using the routing and account numbers, though it may take one to three business days to complete.
Alternatively, you can withdraw the money in cash and deposit it at your new bank, though this is slower and less secure. If the amount is large, a transfer through the banking system is safer.
Closing your old account
Wait at least 30 days after your last direct deposit or automatic payment has moved to your new account before closing the old one. During this waiting period, watch for any stray payments that still arrive at the old account. Check it weekly online or by phone. If a payment arrives, contact that biller or sender immediately and give them your new account information.
Once you're confident no more payments are coming, contact your old bank and ask to close the account. You can do this online, by phone, or in person. The bank will confirm that the account balance is zero (or transfer any remaining balance to you) and close it. Ask for written confirmation of the closure.
Some banks charge a fee if you close an account within a certain period—often 90 days to a year. Check your account agreement or ask before you close to see if this applies to you.
What to do if a payment goes to your old account
If you discover that a payment arrived at your old account after you've closed it, contact your old bank immediately. Explain that the account is closed and ask if they can retrieve the deposit. Some banks will hold it for a period and allow you to claim it; others will return it to the sender automatically.
If the bank returns it, contact the sender (your employer, the government agency, the biller, or whoever sent it) and provide your new account information. Ask them to resubmit the payment. Keep records of these conversations in case you need to dispute a missing payment later.
Frequently Asked Questions
Can I change my bank account without closing my old one?
Yes. You can keep your old account open indefinitely while using your new one. Many people do this as a safety net for stray payments. You'll just pay any monthly fees the old bank charges. Close it only when you're certain no more payments are coming.
How long does it take to switch banks?
Opening a new account takes minutes to hours. Updating all your direct deposits and billers takes a few days to a week, depending on how many you have. The full switch—where all money flows to the new account and none to the old—usually takes two to four weeks.
What if my employer won't change my direct deposit?
Contact your payroll or HR department in writing and ask them to confirm in writing that they received your request and when they'll process it. If they refuse or delay, escalate to your manager or HR director. Employers are required to process direct deposit changes, though timelines vary.
Do I need to update my checks if I switch banks?
If you have checks from your old account, you can still use them—they'll work as long as the account is open. However, once you close the old account, any checks written against it will bounce. Order new checks from your new bank before closing the old account, or stop using checks altogether and switch to digital payments.
What happens to pending transactions when I close my account?
Pending transactions—charges that have been authorized but not yet processed—will still go through even if you close the account. The bank will either pull the money from your new account if you've linked them, or return the transaction if you haven't. Contact your new bank to ask how they handle this.