Sometimes opening an account with a new bank can benefit your business. Here’s our guide to switching banks easily.
We’ll walk you through the best way to change banks without a hassle. First, we’ll consider some of the reasons you might want to change bank account providers. Then we’ll break the process of switching banks down to 8 simple steps and offer some tips on how to execute each step successfully.
Why Switch Bank Accounts?
There are multiple reasons you might wish to consider switching your business bank account to a new provider:
- Your business is moving to a new location
- You’re dissatisfied with your current bank’s customer service
- You could get better interest rates at another bank
- Another provider charges lower fees
- You want a bank with better mobile banking options
These are some of the most common reasons for switching. You may have others of your own.
How Difficult Is It to Switch Banks?
If you’re thinking about changing banks, you might be wondering, “Is it hard to transfer my business bank account to a new provider?” Fortunately, the answer is it’s pretty easy. The process you used to set up your old account essentially repeats, with a couple minor additions.
It boils down to:
- Opening a new account
- Setting up the new account to take over any automated deposits or payments you had set up with your old account
- Closing your old account after verifying that the new account is working properly
Basically, if you were able to set up your old account, you should have no trouble setting up a new account.
A Guide to Switching Banks in 8 Steps
The process of switching business bank accounts can be broken down into 8 smaller steps:
- List your automated transactions, linked accounts and automated accounting procedures
- Find a new financial provider
- Open a new account
- Set up your new account’s online and mobile profiles
- Connect any linked accounts
- Update your automated deposits and payments and accounting procedures
- Keep both accounts open temporarily to verify a smooth transition
- Close your old account if desired
Here’s what’s involved in each step and how to execute each one.
1. List Your Automated Deposits and Payments, Linked Accounts and Accounting Procedures
Your existing business account probably has some automated transactions set up. These may include automated deposits, employee payroll direct deposits and vendor bill payments.
You also may have your account linked to other accounts. Some of your automated transactions may involve these other accounts. For instance, you may have automatic transfers set up.
Make a list of any automated transactions and account links you have in place with your existing account. You’ll need to migrate these to your new account after you set it up.
You’ll also want to review any accounting procedures associated with your current account and its automated transactions and linked accounts. These also will need to be updated. Talk with your accounting professional about any changes which need to occur here.
2. Find a New Financial Provider
One of the most important things to consider when changing banks is who to choose for a new provider.
When shopping for providers, consider factors such as:
- Location and accessibility
- What types of accounts are available
- Interest
- Fees
- Technology tools
- Customer service
Look for a provider who meets your needs in these areas.
3. Open a New Account
The next step is to open your new account with your new provider. You’ll need to present any documentation your new provider requires, such as your personal tax identification number or your company’s employer identification number.
You also will need to make an initial deposit. Your new provider may have a minimum deposit requirement.
4. Set Up Your New Account’s Online and Mobile Profiles
To start managing your new account efficiently, you’ll need to set up your online and mobile profiles. You may need to complete steps such as enrolling in services, downloading apps, setting up passwords and verifying accounts.
5. Connect Any Linked Accounts
After you’ve set up your online and mobile profiles, you should be able to connect your new account to any other accounts your old account was linked to for purposes such as setting up transfers.
The process of connecting accounts may require verification in some cases. For example, if you’re linking a bank account to a PayPal account, it may take several days to complete verification.
6. Update Your Automated Deposits and Payments and Accounting Procedures
Now you can use the list of automated transactions you compiled earlier to update any deposits and payments so they now connect with your new account. As with the previous step, this may involve waiting for verification in some instances.
You’ll also want to update any automated accounting procedures you use. This may involve changing some settings in your accounting app or other apps.
7. Keep Both Accounts Open Temporarily to Verify a Smooth Transition
Before closing your old account, you should wait a suitable period of time to make sure your new account is working correctly. If you have automated bill payments or deposits set up on a monthly cycle, this may take up to a couple of months.
8. Close Your Old Account If Desired
Once you’ve verified that your new account is working correctly, you can close your old account if you so desire. In some cases, you may decide to leave your old account open so you can continue using it for specific, limited purposes. In this case, make sure you update your accounting procedures so that they reflect this.
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Get Your New Bank Account Up and Running
You may have various reasons for wanting to set up a bank account with a new provider, ranging from moving to dissatisfaction with your current provider to seeking better rates or services or technology. The process of switching isn’t much more complicated than setting up your old account. Essentially, it involves opening a new account, migrating any automated transactions from your old account to your new one and verifying that your new account is working correctly before closing your old one. Follow the steps outlined here to get your new business bank account up and running.
