How To Switch Savings Accounts

Switching banks is easy, but it's important to follow these steps

 A man deposits cash with a bank teller.
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Not all savings accounts are the same, and switching savings accounts can offer you better financial opportunities. Your existing account may have been meeting your needs, but a new account at another bank may have more features at a lower cost.

Two key features to look for in a new savings account include the interest paid on your money and the fees. If you're ready to switch banks and move your money to another savings account, it's important to compare your options to find the right fit for you.

Key Takeaways

  • A savings account provides a secure place for your money to earn interest as you build an emergency fund or save for long-term financial goals. 
  • Before switching banks or savings accounts, consider the interest rate, account fees, and the ease of accessing your money.
  • Savings accounts at online banks may offer higher rates than savings accounts at traditional banks or credit unions. 
  • Before closing an old savings account, cancel any recurring debits or credits on the account, including direct deposits, transfers, or automatic bill payments. 

How To Switch a Savings Account to a New Bank

A savings account is a deposit account that's designed to safely hold the money you don't plan to spend right away.

A savings account is an ideal place to securely store your money while earning interest. For many people, a savings account is one of their first bank accounts and can be a building block for good financial health.

There are a few key steps you'll need to complete to open your new savings account, transfer the money from your old savings account to your new account, and close the existing account.

Apply for a New Savings Account

Many banks make it easy to open a new savings account just by completing an application and giving the bank some basic information. You can usually complete an application online or in a branch location.

You’ll likely need to provide personal information like your:

  • Name
  • Address
  • Date of birth
  • Social Security number
  • Phone number
  • Email address

If you're opening a joint savings account with someone, you'll also need to provide their information. The bank may ask you to upload a copy of a government-issued ID to verify your identity and you may be subject to a ChexSystems check. ChexSystems is a consumer reporting agency that collects data relating to negative activity for bank accounts, such as bounced checks or unpaid overdrafts.

Opening a new savings account typically doesn't trigger a hard credit check, which would negatively impact your credit temporarily.

Note

The entire process of switching savings accounts should only take one or two business days. However, you may have to wait for one to two weeks to receive all your documents or any ATM cards in the mail.

Transfer Money From the Old to the New Account

Once your new savings account is open, which may be instantaneous if you're applying online, you'll need to fund the account with an initial deposit. If you're opening a savings account in person, you may be able to make your initial deposit with cash or a check. However, transferring the money from the old account to the new account can be done in a few different ways.

ACH Transfer

If you opened a new savings account, you could move your entire balance from your old savings account via an Automated Clearing House transfer (ACH). To do this, you'd have to link the accounts first, then schedule the transfer from your original savings account to your new account.

Check Transfer

You could transfer funds from your old savings account to your new one using a certified check if you're moving money between traditional banks or credit unions. You'd need to visit the branch and request a certified check for the withdrawal amount, but you'll likely be charged a fee. From there, you could deposit the check into your new savings account in person or mail it.

Reroute Automatic Transactions

If you plan to close your old savings account, you'll want to transfer over any automatic transactions to your new account, which may include:

  • Direct deposit of your paychecks
  • Direct deposit of government benefits or tax refunds
  • Automatic bill payments
  • Recurring deposits from a checking account

If you had banking alerts set up with your old account, you'll need to establish them with your new bank, which should be possible through the bank's online platform or mobile app.

It's important to transfer all of your automatic deposits and payments over to the new bank account because if you don't, new transactions on the old account could trigger an overdraft if there are insufficient funds, triggering an overdraft fee.

Close the Old Account

Once you've transferred over all deposits or recurring payments from your old savings account, you can ask the bank to close it. Although you may want to keep your old account open for a few months to monitor it for any automatic transactions you may have missed.

However, be mindful of fees with the old account if you keep it open. If there's a minimum balance requirement to avoid a fee and you transferred your money to the new account, you may get charged a monthly fee on the old account.

Note

You may need to call the bank to make a request to close your savings account. Be sure to ask for written verification that it's closed. Keep in mind that your bank may then deactivate your online or mobile banking logins.

What To Look for in a New Savings Account

Switching banks is relatively painless, but it takes some planning and careful consideration to find the right savings account for you. Moving to a new savings account could pay off with lower fees, a higher interest rate, or better service. You can open a savings account at traditional banks, credit unions, and online banking institutions.

Note

FDIC coverage insures savings accounts for up to $250,000 per account ownership type, per depositor, per financial institution. So, even if your bank fails, your savings account deposits are protected up to that amount.

Fees

Banks make money by charging fees for their products and services and savings accounts are no exception. Higher fees can detract from the money you're saving. So check the fee schedule for each savings account you're considering to estimate how much you might pay. 

The kinds of fees a savings account may charge include:

  • Monthly maintenance fee
  • Excess withdrawal fee
  • Paper statement fee
  • Deposited item return fee
  • Inactivity fee
  • Wire transfer fee

Monthly maintenance fees are fees you pay simply for having the account. An excess withdrawal fee may apply when you exceed the allowed limit for withdrawals from savings per month. For example, your bank may set a limit of six withdrawals per month and charge you $5 if you go over the limit.

Note

In 2020, the Federal Reserve suspended the six-withdrawal-per-month limit for savings accounts, but banks can still set their own limit and charge a fee.

APY

APY or annual percentage yield reflects the amount of interest you could earn on a savings account balance over the course of a year. The APY is larger than the basic interest rate because it accounts for compounding, which means you earn interest on your interest. Comparing APYs will help determine which savings account earns you more money.

While a higher APY is a benefit, it’s important to understand how it’s applied. Some banks may apply the same APY across all balances. So you might earn 0.01% on all your deposits. Other banks may tier your APY based on your balance. So you might earn 0.05% on the first $2,499 in savings, then earn 0.60% on everything you save above $2,500.

Note

As a general rule of thumb, online banks tend to offer higher APY for savings accounts compared to traditional banks. So it's worth comparing interest rates across different banks.

Initial Deposit

If you're opening a savings account, the amount needed to open the account can vary from bank to bank. For instance, you may be able to open a new savings account with no money at one bank while another bank may require an initial deposit of $500. A higher minimum deposit may be required for savings accounts that offer a higher APY. 

Convenience and Customer Service

A savings account is meant to hold money for longer-term goals, or money not needed for day-to-day expenses. Still, it's important to consider how easily you'll be able to access your money. If you expect you'll need your funds after you deposit them, review the bank's funds availability policy. 

Some helpful questions to ask when comparing banks and their savings accounts include:

  • Does the bank offer online banking or a mobile app?
  • Is mobile check deposit an option? 
  • Will the account come with an ATM card or debit card?
  • Will I be able to set up direct deposit or transfer money between accounts?
  • Can I deposit money at a branch or ATM?
  • Are there daily, weekly or monthly limits on the amount or number of deposits and withdrawals?
  • What type of customer support is available? 

Consider Other Products and Services

When searching for how to switch savings accounts, you may want to explore other financial products and services at the new bank. Some of these include:

Consolidating all of your banking products or services into one bank can be more convenient and help you secure better terms with your bank since you have more products with them.

Frequently Asked Questions (FAQs)

How hard is it to switch banks?

Switching banks is fairly easy if you plan ahead. Many financial institutions attempt to make changing accounts easier by offering a "switch kit" that includes a step-by-step guide for how to switch banks.

Can you change a savings account to a checking account?

Once you open a savings account, it typically remains a savings account unless you switch banks and move the funds into a checking account instead. A savings account can be converted to checking automatically if the bank no longer offers the account or if you're making excessive withdrawals in violation of the bank's policies. 

How long does it take for SSI payments to switch to a new bank?

If you change your direct deposit information for Supplemental Security Income (SSI) payments, it can take 30 to 60 days for this change to take effect.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federal Deposit Insurance Corporation. “Deposit Insurance at a Glance.”

  2. Board of Governors of the Federal Reserve System. "Federal Reserve Board Announces Interim Final Rule to Delete the Six-Per-Month Limit on Convenient Transfers From the 'Savings Deposit' Definition in Regulation D."

  3. Social Security Administration. “What You Need to Know When You Get Supplemental Security Income (SSI),” Page 7.

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