Easy methods to Switch Banks (and How It Saved Me $450 in One Yr)

One rainy day last yr, I checked out my savings account and had an epiphany: I had been with the identical bank since I used to be ten years old and had no idea why. At no point had I questioned my customer loyalty, or whether it was even deserved. Switching institutions appeared like such a time-consuming task that I hadn’t even considered it. Besides, all banks were just about the identical, right? But once I checked out the high service fees I used to be paying and the meagre interest I used to be earning, I began wondering if there weren’t higher places for my money. Spoiler alert: there have been.

Need to understand how I finally made the switch? Listed here are the steps you’ll have to take:

Easy methods to switch banks

• Consider why you ought to switch banks
• Assess your needs
• Open a brand new account
• Redirect automatic payments and deposits
• Begin using your recent account
• Close your old account

Why do you ought to switch banks?

In my case, it’s easy: the cash in my accounts wasn’t growing and might be blossoming elsewhere. Comparing notes with friends, the fees and rates of interest of various banks weren’t the identical. My eyes were now open to how much money I might be making elsewhere.

Other reasons could vary. It’s possible you’ll be able to’t stand your bank’s mobile app or website. Perhaps their customer support is horrible. Otherwise you’re moving out of your bank’s area of operation and want something closer to your recent home.

For some, the temptation of sign-up bonuses and rewards is a giant draw. These will be all the things from money bonuses, free items resembling iPads, or guarantees of no fees and higher rates to your first yr. One example is that this offer from Bank of Montreal that may earn you a bonus of as much as $350 if you open a brand new Premium or Performance chequing account with them online. One other is that this one from CIBC that guarantees a bonus rate of 1.25% if you join for an eAdvantage savings account.

Regardless of the inspiration, you deserve a bank that may meet your needs. But what are they?

Assess your needs

While most Canadians’ banking needs are similar, their levels of priority are what’s unique to the person. For instance, in case you’re someone who does all their banking online and barely uses money, nearby ATMs should not going to be high in your wishlist, while an easy-to-use mobile app and website probably will likely be.

To make your mind up what your personal hierarchy of needs are, try making an inventory of all the things you’re in search of – starting along with your absolute “musts” all the way in which right down to things that might be nice, but aren’t essential. When you’ve got this established, you’ll be able to match your most vital needs with information from bank web sites, eventually arriving at one institution that suits you best.

Reasons to modify banks

• Easier website and app
• Higher rates of interest and lower fees
• Access to ATMs
• Branches open late and on weekends
• User-friendly money transferring
• Tighter security
• Higher customer support
• Rewards and incentives for brand new clients
• Shorter wait times

Easy methods to open a checking account

Once I knew what I used to be in search of, the strategy of shopping around for a brand new bank began. It was surprisingly refreshing. I wasn’t going to only accept whatever charges and rates of interest my bank selected – I felt in command of my money for the primary time. 

Compare bank accounts

I made an inventory of each bank, each online and brick-and-mortar, operating in my home province. From there, it was a strategy of investigating each, noting their fees, rates of interest, and any advantages or bonuses offered. Once I started to check them in an informational battle royale, just one victor remained. In fact, now that I’m working for Ratehub, I noticed I could have saved lots of time using their handy table to compare chequing accounts.

Opening a checking account online

After finding the best bank for you, it’s time to open an account. While you’ll be able to still walk into your local branch and do that in person, concerns across the spread of COVID-19 have resulted in an increasing number of people going the net route. Thankfully, most institutions have made this process relatively quick and painless. Simply follow the directions provided in your bank’s website and ensure that you may have all of your needed documents.

What is required to establish a checking account

To be able to arrange your recent account, you’re going to wish to offer proof of identity. A sound Canadian driver’s license and passport are essentially the most straightforward option, but in case you don’t have either of those (or just one), listed here are another documents you should utilize:

• Birth certificate issued in Canada
• SIN card issued by the Government of Canada
• Certificate of Canadian Citizenship or Naturalization
• Everlasting Resident card or an Immigration, Refugees and Citizenship Canada (IRCC) form IMM 1000, IMM 1442, or IMM 5292

It’s value noting that, while a SIN isn’t required for many chequing accounts, it’s possible you’ll need to offer one to open an interest-earning savings account.

Keep Your Old Account Open

NOTE: Don’t close your old account before opening your recent one. Experts agree it’s an excellent idea to open your recent account a minimum of two weeks before starting to transfer your money. It’s because it will probably take as much as ten days to receive your recent debit card within the mail, so you ought to ensure that you’ve still got access to your outgoing card (and a specific amount of connected funds) in case of any delays. As a bonus, this will even offer you some overtime to establish your login credentials and familiarize yourself along with your recent bank’s online services.

Once all the things is in place, begin by transferring a small amount of funds into your recent account to make it lively

Will switching bank accounts affect your credit rating?

So long as your old checking account is in good standing on the time of closure, there is no reason that switching accounts must have any effect in your credit rating.

The one way your rating will take a success in this example is in case you owe an impressive balance to your old bank before closing your account. Much like several other existing debt, it will take points off your rating, but the easy act of switching accounts itself won’t hurt.

Easy methods to arrange automatic withdrawal:

When you’re like me, you’ve got several automatic withdrawals and recurring charges in your chequing account. Between web, hydro, Spotify, Netflix, and a slew of others, I had lots of service providers to update with my recent banking information. Unpaid bills can result in lower credit scores, and I didn’t want that. Conversely, a paycheque from work bouncing back because I didn’t give HR my recent account info would have been a headache no ibuprofen could cure.

Feeling overwhelmed? To cut back a stressful task, create a master list of every service provider, subscription service, and employer that needs your updated information. We’ve provided a downloadable template you should utilize below:

With most subscriptions, you’ll be able to switch your banking details online, but in relation to more essential services resembling web or hydro, some still require you to mail them your recent information the old-fashioned way. Just remember to put an extra phone call after a few weeks to ensure that your changes were received. 

To update your employer along with your recent account, you’ll probably have to contact their HR or payroll department and supply a brand new void cheque or direct deposit form as well. In either case, you should utilize our downloadable template below:

Some institutions even provide a downloadable PDF of a void cheque with all of your account information, making the method easy and efficient.

Also, in case you’re someone who uses online payment platforms resembling Venmo or PayPal, ensure that your recent banking information gets included in those accounts as well to avoid any frustration when making online purchases.

Begin using your recent account

Getting my brand recent debit card within the mail made it feel official: I used to be moving on. After giving my updated information to everyone who needed it and transferring a small chunk of cash into my recent account, it was time to take my card for a test drive.

I began small, using it to buy on a regular basis items like groceries and toiletries. My first debit transaction went through with no issues; sweet relief. The toughest part was now over.

But don’t close your account yet. As a substitute, leave it open for just a few months as insurance against any automatic withdrawals or recurring payments which will have slipped your mind. This type of thing happens more often than you’d expect, so it’s good to still leave a little bit of money behind during that point to handle any surprises.

Easy methods to close a checking account

Brimming with confidence in my recent account, I used to be ready for the last step: closing my old one for good. I started by transferring the remainder of the cash over to my recent bank, then called my old bank to allow them to know I used to be leaving. They tried to lure me back with temporary rewards and incentives, but my mind was made up.

Ensure to ask about any potential last-minute fees and get written confirmation of account closure. This may protect you in case of any administrative errors. Even still, some banks may reactivate your account as a result of an unexpected automatic deposit, so it’s an excellent practice to call them after a month has passed to confirm that your closed account hasn’t modified its status.

 The underside line

While the concept of fixing financial institutions can seem scary, the financial advantages of upper rates of interest and lower fees far outweigh the effort and time it takes. For instance, my decision has earned me $450 over the past yr. If I were getting paid to modify banks and it only took me two hours to perform, that’s $225 per hour. Since I left my old bank for one which aligned with my current needs, I’ve never once looked back or regretted it, and I’m reminded of the good selection I made each time I take a look at how much I’ve saved.

Like anything, getting in prepared and educated will make your complete process infinitely easier, so download our templates, use our comparison tables, and leave a comment below telling us how much money you’ve saved.