Savings accounts may have different features, interest rates, and fees. Are you willing to find better customer service? Do you plan to move and want to get more banking locations? Are you searching for a higher interest rate?
Whatever the aim, switching your savings account shouldn’t be annoying or stressful. In this article, we will share some tips on changing your savings accounts, finding the most suitable financial institution, and avoiding pitfalls.
How To Switch A Savings Account
What is a savings account? This deposit account is meant to hold your funds securely if you don’t aim to spend this money straight away. This is a perfect place to store your finances and get interested safely.
Every consumer should open this deposit account if they want the funds to work for them and earn interest. Saving your funds for the future will help you have a more significant sum for your short- or long-term financial targets. A solid savings account is a sign of good financial health and stability.
Are you ready to switch your savings account? Here are the steps you need to take.
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1. Where Do You Want To Open A New Account?
There are several financial institutions where you may open an account, such as a local bank or a credit union. Are there special tips on how to select the right institution?
First, you should consider the banking features you are willing to have. Are you interested in having an online banking option? Do you want to have new savings account with higher interest rates? Is a nearby physical location or ATM vital for you? You may choose the institution that offers you what you want, depending on your needs.
There is no need to have all your banking accounts in one institution. Your checking account may be in one bank, while your savings account will be opened in another bank or credit union.
This way, you can benefit from higher rates or annual percentage yields if you select a digital savings account. Don’t open numerous accounts, as they should be easily managed. Some people find having all their accounts in one bank easier, while others want to take advantage of perks and higher earnings.
2. Apply For A New Account
It won’t take too long to open a new account. Many financial institutions offer a short application form that is to be completed to open a savings account. Only essential financial and personal data is required to undergo this process.
The application may be completed physically when you visit the location or on the web from the comfort of your home. What information do you need to fill in? Usually, the credit union or the bank will ask you to fill in your full name, current address, phone number, Social Security number, email address, and date of birth.
A copy of your government-issued ID might be required to prove your identity. Besides, if you are planning to open a joint savings account, another person’s data should also be completed. Remember that a credit fix may be necessary when you apply for a lending option, but you can open a savings account with any credit rating.
3. Transfer Your Funds From Your Old Account To Your New Account
When you aim to move, you make sure to check all the essentials, such as electricity, water, or gas, before you leave. The same is true for your account. You need to close your old account and transition your money from an old one to a new one.
Here are some stages of this transfer:
- Change direct deposits. You should update financial data at your workplace so that your income is transferred to the new account next month.
- Store some funds in the old account. To prevent you from paying a minimum-balance fee, it’s necessary to keep some funds in your old bank account.
- Reschedule automatic payments.
4. Close Your Old Account
Have you transferred your money and deposits from the old account to your new one? It’s time to close your old account, then. It can be left open for a certain period, such as for several months.
Consider potential charges associated with the previous account if left open for too long. Because we fill our homes with internet-connected devices, securing them from hackers and fraud is essential, mentions Federal Trade Commission.
When you use your cell phone or computer to access online banking features, you must protect your privacy and sensitive data so that no one can withdraw your savings. As all your devices are connected to the internet through the router, change the default settings and password, enable encryption, check for updates, and disconnect unutilized devices.
Things To Look For In A New Account
What are some of the most significant things you should consider when looking for a new account? Switching your savings account isn’t time-consuming, primarily since this process can be performed solely on the web.
On the other hand, consideration and planning are required to search for the most suitable option. You may want better customer service, higher interest, or lower fees.
There are different places where you may turn for this assistance. Online banking companies, credit unions, and local banks should be considered. You should look for the following:
- Fees. Some banking institutions charge more fees for their services and products, and they want to earn more money. Higher charges will lead to smaller earnings in your savings account. So, you should look for a new account with little or no excess withdrawal fee, monthly maintenance fee, paper statement fee, inactivity fee, and a deposited item return fee.
- APY. This figure shows the sum of interest a person earns on their savings account balance for one year. The annual percentage yield is higher compared to the primary interest. Make sure to compare this figure in several institutions to boost your savings.
The Bottom Line
In conclusion, it isn’t tough to switch to a savings account. You should do some planning and take your time to explore banking options.
Turning to a credit union, trying online financial companies, or going to the local bank branch may be beneficial. Choose the institution, apply for a new account, complete the request form, transfer your money to a new account, and close the old one.