Your Guide to Switching Banks — Don't Forget Step 2

Changing financial institutions might seem like a big task, but it’s easier than you might think — and the benefits can be well worth the effort. Whether you’re looking for better rates, better service or a more personalized banking experience, moving your accounts to a new financial institution can give you a fresh start.

If you’re considering switching from a bank to a credit union, or just moving to a new provider, here’s a practical guide to help you navigate the process smoothly. From updating your direct deposit information to handling pending transactions, we’ve got you covered.

Why Switch Financial Institutions?

One reason to switch is because you’ve found better rates and lower fees at another institution. For example, credit unions often have higher savings rates, lower loan rates and fewer account fees than traditional banks. This could help you to grow your money faster and do more of what you want with it.

Making the transition could also mean a better overall experience — whether it’s getting personalized service at your local credit union or gaining access to better digital banking tools and resources that your current financial institution doesn’t offer. These benefits can make managing your money easier and more rewarding and might prompt you to make the switch.

Once you’ve decided on your new financial institution and opened a new account, it’s time to tackle the logistics of making the switch. Pro tip: keep you old account open until you’ve completed the steps below.

Step 1 – Update Your Direct Deposit Information

If you receive a paycheck, government benefits or other regular income, you’ll need to update your direct deposit information with your employer or other payers. Here’s how:

Employer: Fill out a new direct deposit form with your new bank’s routing number and your new account number.
Government benefits: If you receive Social Security, unemployment or other government payments, you’ll need to update your direct deposit information with the appropriate agency. You can typically do this through their website or by calling them directly.

Make sure to give your employer or government agency enough time to make the change — this could take one or two pay periods to fully process.

Step 2 – Update Your Automatic Payments

Next, it’s time to update all of your automatic payments. These might include:

Utilities: Update your electric, gas, water and any other utility accounts with your new checking account or debit card info. You don’t want to risk missing a payment because your bank details have changed.
Streaming services: Don’t forget about streaming services like Netflix, Spotify, Hulu and any other monthly subscriptions. Log into your accounts and update your payment method to reflect your new bank or credit union info.
Mobile phone and cable: Update payment information for your mobile phone, internet and cable service providers.
Digital payment platforms: Do you use payment services like Venmo or PayPal? Be sure to connect your new account or enter your new card information.
Other online subscriptions: Make sure to update payment details for any other online accounts or vendors you use regularly. These might include Amazon, Walmart, DoorDash or even daycare providers.

This is also a good time to check if there are any services you want to cancel or adjust. If you’ve accumulated subscriptions you no longer use, consider trimming them to save money.

Step 3 – Update Your Bill Pay Settings

If you use bill pay through your old financial institution to pay your credit cards or loans, it’s important to update the payment details. This includes:

Credit card payments: If you’re using bill pay from your previous bank to pay your credit card bills be sure to update the account information with your new bank or credit union.
Loan payments: If you have an auto loan, mortgage or personal loan set up through bill pay update those details as well.

Make sure your payments are set up correctly in your new bill pay system to avoid late fees or missed payments.

Step 4 – Switch Over Your Checking Account Transactions

You’ll want to review your checking account activity to make sure everything is transferred over. For example:

Pending transactions: Look for any pending payments or automatic charges that haven’t yet gone through. Make sure you have enough money in your old account to cover these until they clear.
Checks or automatic transfers: If you have scheduled transfers (for example, moving money from checking to savings), cancel them with your old financial institution and set up new transfers with you new account.

Bonus – Final Tips for a Smooth Transition

Give yourself time: It can take a few days to fully transfer over everything, so start the process early to avoid any disruptions.
Check for fees: Make sure you’re not incurring unexpected fees as you move accounts around. Some banks or credit unions may have fees for transferring funds or closing accounts too quickly.
Stay organized: Keep track of all your payment changes and make sure everything is updated before the next payment cycle.

Make the Move

Making the switch to a new financial institution may feel like a lot of work at first, but with this guide you’ll stay organized and on top of everything. And once you’re settled in, you’ll be glad you made the change — whether it’s to get better rates, enjoy a more personalized banking experience or simply feel like you’re in control of your finances.

Looking for a financial partner who puts you first? Horizon Credit Union offers competitive rates, personalized service and a suite of online tools that make managing your money easy. Ready to make the switch? Click the Open Now button in the top right hand corner of this website or stop by a local branch today!