- Date : 10/06/2022
- Read: 5 mins
Bank accounts are mandatory to manage your personal finance. And, switching to a new bank and opening account might sound like a tough job, but sometimes it becomes essential. But before switching to a new bank, it is advisable to consider and update your products and services
Reasons To Switch Bank Accounts
Bank accounts have become a necessary component of our everyday lives. They've simplified money management. However, there may be a variety of causes or circumstances that force you to change banks, such as:
- Shifting to a new city
- Unsatisfactory customer services
- Better banking facilities in other banks
- Lesser number of ATMs or branches in your locality
- Closure of bank branch without intimation
- Switching to online bank
It was simple to decide to change banks, but which bank should you go with? What services should you think about before opening a new account with a different bank?
There are various factors that decide with which bank you can open your new account. But more than deciding on a bank, the most tedious task is to remember the things that are to be updated with the new account. While making the right decision of moving your money, it's better to have a checklist of services and aspects that are to be updated and changed with the change of bank.
Process To Switch Your Bank Account
1. Finding the Bank
While moving to the new bank, the foremost thing is to decide whether you want to opt for a traditional bank, or online bank. Create a list of things to compare the banks to make a correct decision.
i. Bank Fees: Every bank has its own set of rules and charges. Before closing your account and selecting a new bank, read the rules carefully and know all the bank charges and fees.
ii. Interest rates you can earn on savings: Who doesn't want to earn a good rate of interest on idle money? While selecting the bank, you can always ask about the interest rate the bank provides on their different accounts.
iii. Online and mobile banking services: In the world of digitization and cashless services, mobile and online banking services are the utmost priority. Customers choose banks that offer simple online banking services so that they can have transactions without difficulty.
iv. Branch and ATM locations: While moving the money, you should always go with the bank which has a branch and ATM in your locality. So you could have easy service availability 24*7.
v. Added features or benefits: many banks provide added benefits to their customers, for e.g., some banks have an easy policy to save your spare change, or they provide you with bonuses that let you earn rewards on opening a new account.
2. Make a List of All Link Transactions
As you switch banks, it’s essential to switch over automated bill payments, direct deposits and recurring transfers to your new accounts. Because it would be a big blunder if your pay-cheques will be sent to your old account or your automated bill payment will be processed for your old linked account and will fail. Thus, to save yourself from all these problems, it is advisable to make a list of all the linked transactions to update those services:
i. Automatic deposits and bill payments: Banks have features that allow direct deposits of pay cheques or business income, child support or alimony payments, instalment & premium payments, mortgage & credit card bills and other recurring payments from linked bank accounts. So once you close your account and switch to a new one. It is essential to change the account information with all the deposits and payments accounts.
ii. Recurring subscription payments and transfers: While reviewing your banking services, make a list of any regular subscriptions, such as streaming services, gym memberships, and other transactions that are tied to your account and change them with your updated information.
iii. Reschedule automatic bill payments: Remembering dates is one of the most difficult tasks. So, with increasing banking facilities, we usually link our bills with the accounts. So, it is vital to update the information in automated bill payments to avoid making the payment failure mistake as it can harm your credit score.
iv. Income Tax site - since, you have updated your bank account everywhere and to each documents, it is also necessary to remember to change your bank account details on income tax site so that any tax return is refunded in right account.
3. Open the account: Complete the account opening procedure with all required papers and submit an application to open an account.
4. Sign up for online or mobile banking: To get access to your new account and start making the transactions, enrol to mobile or online banking. Update all the payments and transactions as per your list.
5. Close your old accounts: Since you have completed all the necessities and have a new account, you can close the old account to finish the account switching process.
6. Dispose of your cards: since you have got access to your new account it is necessary to remember to dispose your old debit cards and credit cards.
Whatever is the reason to change your bank, don't rush and get to know what you need before getting started. It’s important to compare banks carefully to make sure you are making the rightful decision. The better you understand the process and take the time to think, the easier it is to switch banks.