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How Long Does It Take to Switch Banks?
If you’re planning to switch banks, you may be wondering how long it will take. The answer is: It varies. Making the leap from one financial institution to another is a process that can stretch out from a few hours to a month, depending on how much there is to be done and how carefully you make the change.
If you’re new to banking, you can probably make the switch pretty quickly, but if you have several accounts and you’ve been collecting paychecks and paying bills for a while, it may take a few weeks before you feel settled into your new checking and savings accounts.
How Long Does It Take to Switch Banks?
How long the process takes is a difficult question to answer, in part because it depends how you define “switching banks.”
If you define switching banks as simply opening accounts at a new bank, it won’t take long at all. But if you define switching banks as opening an account at a new bank and transferring bills set to autopay and ordering paper checks, then it will take a little while.
Transferring your finances from one bank to another is a little like moving into a new home. The moment you’re presented with a key to the front door, given the furniture you have to transport and belongings you have to pack, it still takes a while to actually make the move. Switching banks can work in a similar way, with several timelines you’ll want to keep in mind:
- Opening a new bank account: A few minutes or a few days. Opening a bank account should be on the fast side, but you might have to wait a few days if, for instance, your new bank has an issue with your application. For instance, if you have some overdrafts that you still owe your old bank, you might be asked to pay those debts off first.
- Transferring money from one account to another: One to five business days. Transferring money between banks can often be done in one business day or less. But it also may take longer depending on how the banks operate and whether this is a transfer between domestic or international banks.
- Closing out your old account: Up to 30 days. Even if you finish transferring automatic withdrawals and direct deposits from the old bank to the new one in a day, you should probably wait a few weeks and keep some money in the account. This is in case any stray checks or automated withdrawals that you forgot about go through. You could keep the bank account open longer than that, but if you pay a monthly maintenance fee, you won’t want to keep the old account open indefinitely.
Will Switching Banks Hurt Your Credit Score?
Switching banks will not hurt your credit score. Bank accounts don’t affect your credit. How you use the bank account, however, could affect your credit score.
For instance, if you switch banks and owe the old bank money, and if that bank has trouble collecting its money, it could send your debt to collections. The collection account could appear on your credit report, and would likely result in a credit score drop. But in that case, it’s the act of owing money to your old bank that hurts your credit score—not having made the switch to a new bank.
How to Switch Banks
Switching bank accounts is a pretty straightforward process. You’ll want to do the following:
- Research banks: Spend some time comparing banks and bank accounts, and determine what advantages or disadvantages banks you’re considering might have over the bank you currently use. It’s enough of a hassle to change banks that you wouldn’t want to rush into working with another bank that doesn’t offer the features and services you want.
- Open the new bank account: Go to the bank’s nearest brick-and-mortar branch and request to open an account or visit the bank’s website where there will be an online application that you can fill out.
- Remember your direct deposits: Move any of your direct deposits to the new bank account.
- Make a list of automatic payments: You’ll need to switch your automatic payments from your old bank to the new one. This, along with updating any direct deposits, is probably the longest part of the process of making the bank switch.
- Settle into your new bank account: For instance, link your new checking account to your savings or retirement accounts, so you can continue to save money for an emergency fund or your retirement.
- Close out your old bank account: Wait a few weeks after opening your new one and consider leaving a little money in the account, in case there are any charges you’ve forgotten about that may come through.
The Bottom Line
It doesn’t take much time to open up a new bank account, but it can take a while to actually switch bank accounts. The more financial transactions you were making with your old bank, the longer it will probably take to set up similar arrangements with a new bank. But if you’re dissatisfied with your current bank, changing banks is probably worth doing. The good news is that, unless there are maintenance fees at your new financial institution, it shouldn’t cost you money to switch banks. It will only cost you some time.
For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We are here to assist you with the best mortgage solutions tailored to your needs.
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