How to Switch Banks Without Missing a Payment

You won't miss a payment if you run the switch in one order. Write down everything moving through the old account, open the new one, move what comes in, then move each payment one company at a time. Stop using the old account at least two weeks before you want to close it, let whatever is still working its way through post, and close it last.

Closing early is what costs money, because a payment that's already scheduled will still try to come out of the old account. If you haven't picked the new bank, start with the banks and credit unions with Berks County branches: every later step needs the new account's numbers.

What order should you switch banks in?

Each step takes a different amount of time, so the slow ones start early and the one you can't undo comes last.

1. Write down everything moving through the old account. Every later step works from this list.
2. Open the new account. Everything after this runs on its account number and its routing number, the one along the bottom of a check.
3. Put some money into it. Open it at or slightly above whatever minimum balance it asks for, so the payments you move don't land in an empty account.
4. Move each deposit. Pay, Social Security, a pension, a benefit payment, and it's worth starting with whoever takes longest.
5. Move each payment that comes out of the account. One company at a time, each before its next payment is due, and anything your own bank sends gets set up again at the new bank.
6. Move the card payments when the new card arrives. You can't give out the new card number until you have it.
7. Stop using the old account, and keep it funded. No checks, no debit card purchases, no ATM withdrawals, at least two weeks before the date you want to close it.
8. Close the old account last. Not before every withdrawal has posted to the old account and every deposit has landed in the new one, and it's the step you can't take back.

Write down every deposit and every payment first.

Write it all down from your statements in three groups, because the groups tell you how each line moves.

• Payments that show as debits from the account. Rent or the mortgage, utilities, loan and credit card payments, insurance premiums, and plenty of subscriptions too. These move when you give the company the new account numbers.
• Payments that show on your debit card. Anything billed to the card number: streaming, a gym, meal services, payment apps and digital wallets. These follow the card, not the account, so they move only when the company has the new card number.
• Money coming in. Pay from an employer, plus benefit and retirement payments: Social Security, supplemental security income, disability, unemployment compensation, a pension, retirement plan payments, an annuity, and military or veterans' benefits.

The same company can sit in either of the first two groups, so go by what the statement shows.

Look back far enough to catch something that runs once or twice a year: two months of statements won't show a premium that lands in April and October. Miss it and that company never hears from you. This order is for a household account; if the account belongs to your company, work from what a business account takes here.

How do you move a direct deposit to the new account?

To start a direct deposit with an employer you need two things: the new account's number and its routing number. Ask your boss at a small place, or human resources at a bigger one. Setting one up at a new bank can take several weeks, so start early.

Social Security has four ways to change where the money goes. The fastest is online in your own account. You can also ask your own bank to send the update for you, which not every bank offers, or make an appointment, or call. Depending on the benefit, some changes can't be finished online.

A pension runs on its payer's own monthly calendar, and that calendar sets your date, not your plans. Pennsylvania's retirement system for public school employees pays on the last working day of the month, and a change a retiree makes online takes effect the first of the next month. A request that reaches them in May, for instance, moves the payment sent at the end of June. A change sent on paper can take up to sixty days.

Other pension payers each want their own amount of notice, so ask yours how much, and expect their own form, which may want a voided check attached or your bank to fill in part of it.

How do you move an automatic payment without missing it?

This part is where the money gets lost. An automatic payment is an agreement between you and the company taking it, not between you and your bank. So moving one means telling that company to stop taking it from the old account, following up in writing, and giving them the new details before the next payment is due. Then tell your bank, in that order.

Some payments work the other way round. If you set one up at your own bank, so your bank sends the money to the company each month, the instruction lives at the bank and no phone call to the company will move it. You set those up again yourself at the new bank.

Start with whatever you send the rent or the mortgage payment to, because it's usually the biggest number on the list, and ask how much notice they need, unless it's one your own bank sends. If their next payment still runs from the old account, that's what the money you left there is for.

Once you've told the company and your bank that you've taken away its permission, any further payment that company starts is an error, and you can contact your bank for a refund. Tell your bank right away when you see a payment you didn't allow: the right to get your money back holds as long as you tell them in time.

Give each company on the card list the new number yourself. Some get it automatically and some don't.

How long do you keep the old account open?

Long enough for everything you've moved to stop coming out of it, and for everything coming in to land in the new account once. Stop using the old account at least two weeks before you want to close it: no checks, no debit card purchases, no ATM withdrawals. Keep enough in it to cover the bills still working their way out, and make sure every withdrawal has posted to that old account before you close it, because closing early can trigger fees or other problems. A pension or a paycheck landing in a closed account is the expensive case.

Two things happen when a payment doesn't get moved in time, and both cost money. Either it's declined and the company charges you a late or missed payment fee, or the old account is still open without enough in it and you get an overdraft fee or a returned item charge.

The other way to lose money here is to leave the old account sitting. An account advertised as free can still carry a fee once it's sitting unused, and a bank can close an account itself after no activity for a substantial period, generally years.

After three years with no activity by you, Pennsylvania holds the balance as unclaimed property, which is money the state holds for you, not money you lose. Activity means putting money in or taking it out, writing to them about the account, agreeing to a change in the terms, leaving any other record that you still want it, or having another account at the same institution that you do use. None of that applies to an account with bills still coming out of it.

How do you close the old bank account?

You can usually close an account whenever you want, by phone or in person. A bank can require you to settle a negative balance first, and some charge a fee for closing shortly after opening.

Closing the account isn't what stops the payments, and that's the part people get backwards. An outstanding check, fee or payment that bounces after closing can cost you fees and follow you to the next account.

A payroll office can send pay to an account that's already closed, and a company can use the old account information for a monthly payment. That happens even to people who told them, so telling each company is worth doing but isn't a guarantee. An institution that reopens a closed account on its own can be acting unfairly, which is worth saying if it happens.

Reopening an account that way can leave you with penalty fees, and where it's a payment being taken it's likely to. If it overdraws the account and you don't repay what's owed quickly, the bank may pass negative information to the companies banks check when you apply for the next account.

A closed account doesn't make the old checks and debit cards harmless, so get rid of them securely once it's closed.

The list is what makes this work; the closing is only the last step. If you're still choosing, look through the banks and credit unions in the county, and our guide to moving to Berks County covers the rest if you've just moved here.

Questions people ask when they switch banks.

Can your bank stop an automatic payment before it comes out?

It can stop an electronic payment, the kind a company pulls on a schedule. Tell your bank at least three business days before the payment is due, by phone or in writing. If it wants a phone order confirmed in writing, it has to tell you, and the order stops binding after fourteen days if you don't send it. There's generally a fee, and it stops that one payment rather than moving it.

Can you close a bank account online?

Sometimes. Some offer it and some want a signed letter, a call or a visit, so ask yours what it accepts.

Is a switch bonus worth chasing?

Not on its own. A bonus is taxable: your bank treats it as interest and reports it on a 1099-INT, the interest form, and interest goes on your return whether or not a form shows up. A short-term offer shouldn't be the only thing deciding where you bank.

Sources

• Federal Deposit Insurance Corporation, "Thinking About Moving to Another Bank?" (March 2024): that setting up a direct deposit at the new bank may take several weeks, that a new checking account is opened at or slightly above any minimum balance, that a bill payment set up on the old bank's website is cancelled there and enrolled again at the new bank's site, that enough money should stay in the old account long enough to pay the remaining bills, that all withdrawals should have posted to the old account before it is closed and that closing early can trigger fees, its own instruction to guard against overdrafts and late fees during the transition, its instruction to dispose securely of old checks and cards once the account is closed rather than assuming they cannot be used, and that a short-term promotional offer should not be the only thing deciding where you bank.
• Nacha, "Ready to Sign Up for Direct Deposit with Your Employer": that starting a direct deposit takes two pieces of information, the account number and the routing number; where to ask at a small employer and at a larger one; and where the nine-digit routing number sits along the bottom of a check.
• Social Security Administration, "Update direct deposit": the four ways to change where a benefit payment goes, including asking your own bank to send the update to Social Security for you, a service not every bank offers, and that some changes cannot be finished online depending on the benefit.
• Pennsylvania Public School Employees' Retirement System, direct deposit and electronic transfer: that a retiree can change the account in their own online account, that a change made there takes effect the first of the next month and has to arrive before the end of a month to move the following month's payment, that a change submitted on paper can take up to sixty days, and that benefits are paid on the last working day of the month.
• Pension Benefit Guaranty Corporation, direct deposit: that a pension payer sets its own lead time for a change of account, and pays on its own monthly schedule.
• Pennsylvania State Employees' Retirement System, direct deposit of pension payments form: that a pension payer may ask for months of notice before a change takes effect, and that it takes a voided check attached to the form or has the financial institution complete part of it.
• Consumer Financial Protection Bureau, “How do I stop automatic payments from my bank account?”: that the permission sits with the company taking the payment, that you tell the company first and then your bank, that a stop payment order generally carries a fee, that a payment a company starts after you have revoked its permission is an error you can ask your bank to refund, and that you should tell your bank right away and are covered as long as you tell it in time.
• eCFR, 12 CFR § 1005.10, "Preauthorized transfers": the right to stop a preauthorized electronic payment at least three business days before it is scheduled, that a bank requiring written confirmation of an oral order must say so and give the address, that such an order lapses after fourteen days without it, and that the payee or the institution must send written notice of the amount and date at least ten days before a preauthorized payment changes in amount, which may be narrowed to amounts outside an agreed range.
• Visa, "Visa Account Updater for Merchants" product fact sheet: that a card network's update service reaches only merchants enrolled through their acquirer.
• Fulton Bank, “Common Automatic Transactions Guide”: the categories of recurring deposits and payments to inventory before a switch, and its instruction to contact each organization and give it the new account information.
• Citizens, “Switching banks”: reviewing the last several statements to build the list, that recurring payments run weekly, monthly, quarterly and annually, stopping use of the old account at least two weeks before closing it, and that closing may be possible online or may take a signed letter.
• Consumer Financial Protection Bureau, "Can I close my account whenever I want?": that you can usually close whenever you want by calling or going in person, that a bank may require a negative balance settled first, that some may charge a fee for closing soon after opening, and that letting items bounce may cost fees and affect opening the next account.
• Consumer Financial Protection Bureau, Circular 2023-02 (May 2023): that institutions have reopened a closed account to process a payment arriving after closure, that a payroll provider may send pay to a closed account and a company may use old account information for a monthly payment, that because closing typically requires a zero balance reopening one is likely to leave the account overdrawn and generate overdraft and non-sufficient-funds fees, and that the institution may then furnish negative information to consumer reporting companies.
• Consumer Financial Protection Bureau, "The bank closed my checking account even though I did not want them to": that a bank may close an account itself after no activity for a substantial period, generally years.
• Consumer Financial Protection Bureau, on fees charged on a "free" checking account: that an account described as free can still carry certain fees, among them a fee on a dormant account.
• Pennsylvania, Disposition of Abandoned and Unclaimed Property Act, 72 P.S. § 1301.3: the three-year presumption on a checking or savings account, and the full list of what counts as owner activity, including holding another account at the same institution.
• Pennsylvania Treasury, Dormancy Matrix: that checking and savings accounts carry a three-year period.
• Pennsylvania Treasury, “Legislative Guide to Unclaimed Property”: that the Treasury holds unclaimed property in perpetuity for the rightful owner or their heirs and works to return it free of charge, so a balance the state takes in is held rather than lost.
• Internal Revenue Service, Instructions for Forms 1099-INT and 1099-OID: that amounts credited to an account are reported as interest whether or not they are designated as interest. Its Topic no. 403 adds that all taxable interest goes on the return even if no form arrives.
• Consumer Financial Protection Bureau, “How do automatic payments from a bank account work?”: that a recurring payment you set up at your own bank works differently from one a company takes, because in the first the permission sits with your bank and in the second it sits with the company.