How To Switch Banks Without Screwing Stuff Up

Switching banks is like going through a divorce. Lots of paperwork, hurt feelings, twinges of regret and the shaky knowledge that if you press on you’ll end up in a better situation afterward.

PF Firewall has an 8-step how-to guide to coach you through the process. Here are a couple highlights:

*Consider ordering checks from your new bank. Even if you never write a check, you still may want to order some in case your employer requires a canceled check for direct deposit.

*After you cancel your automatic bills on your old account, make sure there’s enough money left to cover the payments in case a cancellation doesn’t go through.

When was the last time you switched banks, why did you make the move and what problems did you encounter?

8 Steps To Insure a Seamless Switch From Old Bank To New [PF Firewall]


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  1. Tvhargon says:

    What a coincidence! I was just wondering about that this morning.

  2. The_Fuzz_53 says:

    Chemical Bank? Isn’t that the bank that Jerry Seinfeld’s grandmother uses?

  3. Grogey says:

    Have never had to switch banks… My credit union has been great. Had one mistake with payment on a car loan but they fixed it and even gave me back the missed payment fee (rolled into the loan, but eh)

    Other then it being a very low interest rate on the savings account I cant complain and even then they have tons of ATMs in my vicinity… most of them at a chain of convenience stores in the area.

  4. womynist says:

    Why can’t I see the comments today? Anyone else having this problem?

  5. MonkeyMonk says:

    I moved cross-country earlier this year and had to switch banks. I set-up a checking account at my new location and left about $1,000 in my old account for a few months until I was certain that there were no forgotten checks or charges coming through.

    Then I just wrote a check to myself for the remaining amount, deposited it in my new account, and called my old bank to cancel out the account. No fuss, no headache.

  6. cristiana says:

    How old is that stock photo? Chemical bank hasn’t been around in about fifteen years.

    • smbizowner says:

      No there is: Chemical bank, Michigan. pretty good regional bank
      started in Midland, home of Dow chemical.

      • cristiana says:

        Not to be pedantic, but the Chemical Bank check in the photo is of the old Chemical bank that was bought out by Chase in 1996. The Chemical bank in Michigan is a totally different bank with a different logo.

        • Buy used! says:

          How appropriate! Chemical Bank in Midland, Michigan: home of Dow Chemical’s legendary dioxin contamination. That’s some serious branding.

  7. Fubish says: I don't know anything about it, but it seems to me... says:

    Back in the day (the 1970s) when I was very young I banked at Citibank (shudder) and moved to a different part of NY state – back then we had to bank through a specific local branch. I went into the branch I was using and told them I wanted to close the account and that I would open a new account at the new branch. The told my they could transfer my account “electronically” overnight and I believed them. Well, they “lost” my money. The transfer did not go through and was in limbo for weeks – I didn’t find out until my checks started bouncing to the moon. They blew me off until I wrote to the Attorney General of New York state – then they paid attention and found my cash. It took more months of wrangling until they refunded the bounced check charges. I never, ever used Citibank after that. This is the same bank that charged your account one dollar each time you used a teller for a transaction instead of an ATM machine. It was a rotten bank.

  8. Ebriosa says:

    You can also ask your bank or credit union to make up a couple of counter cheques or direct deposit forms, at least here in Canada. You may want to switch out of automatic bill payments going through if money is tight and you can’t keep a little in your old account, because the billing places are notoriously stupid. If you have told them to start deducting from your new account and your old places doesn’t charge for stop payments on bills you haven’t authorized, then do that to make sure you don’t get double billed. Again, not so much a problem if you’ve got enough to cover the swap and don’t mind waiting to get reimbursed, but if money is tight that can really suck.

    Make sure to deposit funds you’re switching over so they won’t get a hold placed on them if you’re worried about stuff going through. That means in branch usually.

    It does seem like it’s the hardest to change banks when you’re tight on your budget, but that’s usually when you most need to shop around for the best deal for yourself.

  9. speedwell (propagandist and secular snarkist) says:

    A couple weeks ago, I called USAA to start a new checking and savings account. My brother, who banks at USAA, thought it would be a good idea so we can manage family finances. He was standing in the San Antonio head office, doing his own banking, when I called the number to start my accounts. I talked to a nice lady who took down my personal information and my credit union savings account information in order to start the transfer. She told me that they would verify the account by sending a few “penny” amounts that I would verify by telling them the amounts of the deposits. The amounts appeared in my savings account and I verified them as instructed.

    Nevertheless, I was not given access to my account for nine days. On the tenth day, I could not even access my balances online and was directed to call a number. When I did so, I found that my initial deposit had been returned, because USAA had attempted to withdraw the money from my checking account, where I keep only enough money to cover expected expenses. This cost me an NSF fee that my credit union graciously refunded when I called them to find out what happened. I got a USAA rep and a credit union rep on the phone, where they hashed out what had happened and asked me if I would like to retry the transfer. I agreed.

    The transfer was performed. The money left the credit union and appeared as a balance in my USAA accounts. However, I was still unable to access the accounts in any way. When I called USAA to find out why, the rep told me peremptorily, “We decided not to do business with you anymore.” I asked why, and the rep told me, “I’m sorry, this decision is final.” I asked to be transferred to a manager, and after some resistance I was finally transferred to a higher-level rep, who repeated that USAA had decided not to do business with me anymore and that the decision was final.

    I called back to try to get another rep, and they told me my identity needed to be verified. OK, I thought, no problem. The identity verification rep told me that my credit union refused to verify funds on the second deposit, so my money was actually not yet credited to my account. I called my credit union back to find out what happened, thinking there was some mixup. No, it turned out the USAA rep called the credit union, and they quite properly refused to give out information about me or my accounts over the phone to God-knows-who (and good for them, too). So the USAA rep got angry and decided to close my accounts and mark them delinquent. She decided not to try again to verify the funds in some more secure way; she just blocked my accounts completely and sent my case to the fraud department.

    After several more calls, I finally got a rep to tell me that they might consider reinstating my accounts if they got a fax letter from my credit union explaining what happened. I talked to my credit union manager, who was horrified at what was happening to me (I was in tears) and immediately sent them a fax. Now, USAA faxes go to a central number where they are scanned into the computer system, and this is supposed to take “2 to 3 hours”. Later that day I called USAA, and no fax. I asked the CU manager to send the fax again, and I made sure he understood to put the correct routing information and my USAA number on the fax. The next day, still no fax at USAA. The day after that, no fax. The day after that, the CU sent the fax again. Later that day, no fax, The next day, no fax. I asked the CU manager to send me the fax directly and he did so. I faxed it to USAA and got a confirmation page. By the afternoon of the next day, USAA still claimed they had not received any of the faxes. (In fact, they are STILL, as I type, claiming not to have received even one of the four faxes… I’m on the phone with a rep and he is saying so right now.)

    I called my credit union back and finally we decided to e-mail USAA. The e-mail was evidently received, but USAA had already decided to e-mail me a letter saying I was overdrawn to the tune of over two thousand dollars. This overdraft could not have happened, since I had done nothing but ask them to attempt transfers, and I should have shown a three-thousand dollar positive balance based on their having received the second transfer. The letter also said I was being reported to Tele-Check.

    Well, I’m on the phone right now getting the runaround and being treated like a criminal. My credit union does not have my money because they sent it to USAA. USAA says that any verified funds will be returned to me when they close my account. It would be at least two weeks for them to process the refund after closing my accounts, and then they would mail me a check. However, they are also saying they “can’t” verify the funds that they now have on hold, so I will not be getting them back at all.

    Bottom line, USAA screwed up the transfer the first time and is punishing me for their mistake by stealing three thousand dollars from me.

    • speedwell (propagandist and secular snarkist) says:

      Well, I just got the “Unfortunately, we decided not to do business with you, and that decision is final” again, followed up by, “IF your finds clear, then we can make those available to you again; unfortunately, we have no way of knowing if they will clear.” My request to be moved farther up the chain was refused with an “I can’t do that.”

      • Eat The Rich -They are fat and succulent says:

        You don’t “Request” to speak to home office. You simply call them yourself. Don’t rely on being moved up thru the food chain by helpful underlings. They are there to keep calls from reaching upper management.

        Go around their system, right to the top, perhaps in a conference call with the state banking authority. That would get their attention.

    • crazydavythe1st says:

      I’ve never had a problem with USAA, but it sounds like your credit union has more than enough documentation that you could easily take them to small claims court.

      I can’t find it right now, but there’s a entire guide to taking a company to small claims court on this site. There’s usually just a filing fee and you don’t need a lawyer if you have enough evidence of wrongdoing.

    • Eat The Rich -They are fat and succulent says:

      You, my dear friend need to find an attorney and FAST. Don’t rely on USAA to make it right. They won’t do it without a fight.

      It’s your money. Don’t let them get away with this. Take the issue to the top of the food chain. ASAP.

      • speedwell (propagandist and secular snarkist) says:

        Thanks, I just called an attorney and got some excellent advice. I deeply appreciate your support and the support of everyone else on this blog.

    • evnmorlo says:

      So this started when you gave them an incorrect account number to transfer funds out of? Their guardedness is understandable especially considering current government terror campaign against terrorist banking, and personally I would have accepted that they didn’t want my business–there are plenty of banks.

      I think the proper procedure in your current situation is to have the CU transfer the money back, assuming USAA fixed the mysterious $2000 overdraft. Should be possible, though your backwoods CU might drag its feet like it did when dealing with the verification.

      • speedwell (propagandist and secular snarkist) says:

        No, I did not give USAA an incorrect account number. I didn’t say or indicate that I gave USAA an incorrect account number, and you cannot have legitimately assumed that from my comment. USAA simply failed to properly execute the transfer even though I gave them exactly the account information they asked for, and even verified with the rep that it was all the information they needed.

        The CU sent the money to USAA and they can’t just yank it back again. The CU sent the money and USAA accepted it. I already talked to my lawyer about the possibility you mentioned. If you have evidence proving that the CU can actually do it, I urge you to post proof.

        Oh, and the city of Houston is not “backwoods”, my dear.

      • mac-phisto says:

        it wasn’t an incorrect account number – someone at USAA screwed up with the “transaction code”. this is a 2-digit code that appends your account number & designates the type of transaction (savings credit, savings debit, checking credit, checking debit, etc.).

        originators screw this up ALL THE TIME, especially payroll departments. why, just today i spent about 20 minutes explaining this to a worker at a payroll company. so glad that i get to teach people how to do their jobs b/c their employers refuse to spend money to train them properly.

        anyway, the point is that there is nothing suspicious about a mishap like this – it is very common & communication between the CU & USAA should have been sufficient to resolve the matter.

    • mac-phisto says:

      i think you may want to consider talking to USAA’s federal bank regulators – the OTS.

      you might also be able to use this successfully as a threat against USAA. bankers really, really hate having their regulators breathing down their necks, so perhaps suggesting that you plan on filing a complaint with the OTS might produce results.

      they cannot hold your funds forever – funds availability is governed by reg CC. generally, EFTs must be made available by the first business day after the deposit is made, HOWEVER, b/c you are a new customer (& b/c USAA has “reasonable cause to doubt collectibility of funds” due to the initial screw-up), they do have a right to put an exception hold.

      HOWEVER, to place an exception hold, they must notify you when the deposit is made OR they must mail you a notice not later than the first business day after the day on which the deposit is made. & even if they do place an exception hold, it must only be for a “reasonable amount of time”, which is generally considered 9 days or less on new accounts.

      EFTs sent via automated clearing house (ACH) generally cannot be revoked by the ODFI (originating depository financial institution – in this case, USAA) outside of 3 days & cannot be returned outside of 48 hours at the RDFI (receiving depository financial institution – in this case, your CU). so, in short, there’s simply no reason for USAA to be holding your funds hostage.

      hope this helps & good luck.

  10. MaliBoo Radley says:

    If you keep good records, with something like Quicken, you should have to worry about keeping money in an old account. I’ve moved about 15 times in the last 11 years. I’ve never had a single issue when switching banks. I’m about to make my most recent move and foresee no issues. Heck, I can setup my new account online before I even arrive in Malibu.

  11. TBGBoodler says:

    I am doing this now! Thanks for the guide. My local bank for 25+ years (Chevy Chase Bank in the DC area) is now Capital One Bank. They keep sending us these letters about service “improvements” and every single improvement is an improvement for Capital One, not us!

    I am switching to USAA Bank: completely online banking; refunds for all ATM fees charged by other banks; depositing checks with my iPhone, incredible customer service and a 40-year relationship with the organization. What’s not to love?

    I’ll probably keep my local account with a minimum balance, just in case I need face time with a banker.

    • speedwell (propagandist and secular snarkist) says:

      What’s not to love? Try reading my story above. And be careful.

      • TBGBoodler says:

        I just did! Too bad you’re getting such a runaround. I opened my USAA account online and it was up and running in minutes and I had access to the transfered-in funds “on hold” within a couple of days.

        Funny thing is… I had a similar bad experience to yours with our credit union and will never do business with them again. Don’t be too quick to fault USAA for trying to take the money from the checking instead of savings credit union account. This happened to me when I wrote a check on a new credit union account and they bounced the $200 check even though there was nearly $25K in the account.

        They told me that, even though they had printed and issued the checks to me, I was supposed to have written some sort of extra number on the check to ensure it was debited from the correct account (I only had one account). They acted like I was an idiot for asking them to put the correct number on the check when they printed it. That’s when I took the money back out and never looked back.

        So.. you never know.

        Good luck with this. I guess the lesson is… banks suck!

        • speedwell (propagandist and secular snarkist) says:

          Good to know this is not some isolated bizarre case. Bad to know it’s not some isolated bizarre case; I’m sorry it happened to you, too. But thank you for the kind words; I do feel somewhat more optimistic about it all.

        • speedwell (propagandist and secular snarkist) says:

          No, come to think of it, I fault USAA for:

          – Quickly labeling me a fraud and reporting me to TeleCheck
          – Pretending not to have received the money that they did in fact receive and keeping me from accessing it for over two weeks (this is called theft of funds)
          – Reporting my accounts overdrawn by an arbitrary amount some fraud rep pulled out of her ass to make me look bad
          – Pretending not to have received faxes sent to the correct fax number with the correct routing information and the correct USAA member number clearly written on each page, when those faxes were sent at four different times from two different locations
          – Doing everything they could to make me look like a criminal so they could cover their own wrongdoing

          But if you want to defend and do business with a bank that can do all of the above to an innocent customer for no reason, you go right ahead. After all, it will never happen to you. I hope.

          • jamar0303 says:

            Out of curiosity, where are you in? Personally, I’d try an Asian bank if there’s one near you (Shinhan, Woori, BEA, maybe not HSBC… or some locally-owned banks that cater to the Asian community). Always had good service dealing with those.

            • speedwell (propagandist and secular snarkist) says:

              I really could do that. I live ten minutes north of a section of town with a very high proportion of Asian immigrants (Sharpstown). i am used to working with people from overseas. I’ll check it out, thank you.

    • TBGBoodler says:

      Uh oh.

    • chaesar says:

      Chevy Chase Bank was great. I moved right before the buyout and everything associated with closing the account went very smoothly.

  12. ericfate says:

    I never found any reason to follow step 4. I never felt there was any reason for my new bank and my old bank to talk to one another. I opened the new account, switched over my direct deposit, and continued to pay bills from the old account. Once direct deposit switched over, I let that accumulate for three pay periods, and then started transitioning all recurring electronic payments to the new account, while using the old account for one off purchases like fuel and groceries. After three more pay periods had gone by, my bank statements confirmed that I’d managed to successfully transition over my auto and life insurance payments (the only ones that required a cancelled check), so at that point I only used my old account for rent payments (since it was the only payment left that still required a physical check). When the checking account was down to the last few dollars, I stopped using it entirely, and made some time to go visit the branch in person to close the account entirely. I suppose it would have been more complicated had they also held my savings, certificates of deposit, or IRA type stuff — but I never trusted them with those things in the first place. I only initially joined for the free checking, and the fact that they had branches everywhere.

  13. EmDeeEm says:

    *After you cancel your automatic bills on your old account, make sure there’s enough money left to cover the payments in case a cancellation doesn’t go through.


    When my wife switched from HSBC to a credit union, they just decided to ignore her request to cancel the auto-payments and sent them out the next month anyway. So then the (closed) account was overdrawn by $500, plus another couple hundred in stupid fees. Took 7 months to get it all resolved. It was 100% HSBC’s error and we eventually got a signed apology from a VP of the bank, but while it was happening, it was a nightmare.

    • chaesar says:

      This is why I never automate payments, except my mortgage. Potentially avoiding a situation like yours justifies the extra 15 minutes of work every month.

    • myCatCracksMeUp says:

      Hopefully you’ve learned that it’s a mistake to ever have automated payments. Don’t let them just take money from your account. You should always send your payments electronically yourself.

  14. DallasM says:

    It’s actually fairly easy. Just open an account with another bank for $25 (or whatever the minimum is), wait a month for all of the waiting/processing periods to pass, then start transferring your money.

    I learned this one a while back. They key is to know that you can’t transfer money in as soon as you open the account. You have to wait a while.

  15. Not Given says:

    We just opened a new account in a new bank with cash and ordered checks. We still have the old account, just use it for fewer things.
    The time before when we switched banks was when the bank we had our business account in failed back in the 80s. We opened a new business account in the same bank where we had our personal account. I think we ordered checks then, but later on we bought the kind that ran through a (dot matrix) printer from somewhere else.
    We have never done automatic deposit, I don’t think DH’s current job has that, yet. I’m not sure, but the accountant may still be wearing one of those visors and using an inkwell. We did an automatic draft once a long time ago but I didn’t like it so I quit. I have made payments through billpay, but never automatic ones.

  16. Segador says:

    If you’ve ever served in the Military or government, you could switch to USAA. Very easy to switch, and best bank I’ve ever used.

    • speedwell (propagandist and secular snarkist) says:

      Right, if you’re in the military they probably kiss your ass. If you’re an almost-middle-aged woman who just tries to do things the way they ask her to, and they make a mistake while setting up your accounts, prepare to be screwed.

  17. MsFab says:

    I switched banks a few weeks ago & it was a very seamless transition. I never use automatic bill pay, so there was nothing to stop. My company handles direct deposit via an online system, so once I input my new acct info, it was all-set & the next paycheck went into the correct account. The biggest thing was just setting up the new billpay (not auto) with the new bank. Overall easy.

  18. Jason Litka says:

    Am I the only one that thought that the link to PF Firewall was to a site about OpenBSD’s Packet Filter?

  19. legolex says:

    I don’t have automatic billing through any of my accounts. I do have bills linked to my checking but every month I have to go in and authorize myself – which is something I prefer. Last time I switched banks (it was after I was told I wasn’t allowed to open an account) I just simply took out all my money in a cash stack and drove it to my new bank and opened new accounts.

  20. gafpromise says:

    Ugh, I’m going through this now. It’s definitely a pain switching over all of the auto-debits but I’m trying to be smart about it. Since we moved our old bank didn’t have any branches convenient to us, and we’re trying to switch more to a cash-based household so I really needed something closer.

  21. MaxPower says:

    I switched from Wells Fargo to USAA over a year ago. It started because I got my car insurance and loan through USAA. I then realized they had pretty good savings rates whereas Wells Fargo was charging me $3 a month for my savings account when my interest was about $0.03. So, I opened up a checking and a savings account and closed the Wells Fargo checking account.

    The rest of the process pretty much mirrors what they suggested above… transfer some money and your direct deposit into the new account, switch over your automatic bills, and leave enough in the old account just in case. This last step is really important because it’s pretty easy to miss one bill and I actually got dinged by overdraft fees.

    I actually do still have my Wells Fargo account though. It only has about $15 in it but it can be convenient for deposits as USAA doesn’t have ATMs.

    Aside from making sure you get the timing right for paying your bills, there was very little hassle and now I have an AMAZING bank that covers my checking, saving, car insurance, car loan, credit card, mutual funds, and renter’s insurance.

    I see posts all the time on here about how Chase or B of A or (insert name of big corporate greedy bank here) is ripping off their customers and I don’t understand why more people don’t switch over. Obviously it gets more complicated when you have mortgages and things with these banks but it’s worth the time (it really doesn’t take that long) to look into what other banks can offer you. They don’t control you so teach them a lesson with your dollars and take your business elsewhere.