Switching Financial Institutions – It’s Easier Than You Think

This is a bit off-topic with my normal content, but there’s been lots of talk over the past several months about fees and banks and switching away to credit unions or other institutions. As longtime Bank of America account holders, we just recently switched all of our accounts to USAA. It may seem like it’s going to be a big hassle, but, in fact, it was a fairly straightforward process that I would encourage anyone who is thinking about switching to do.

To give you a sense – our oldest BoA account was over 20 years old. We had 7 Checking and Savings accounts, plus our mortgage, credit card, business credit card, auto loans, etc. Here were the steps we took:

1. Prepare, prepare, prepare – We gathered up a list of everything that would need to change. Almost all of our bills are done through Bill Pay – not automatic withdrawal – so we knew we’d only have one place to go there. We have automatic transfers set up between our accounts, and documented those. We also made sure we had enough lead time to make the switch during a pay cycle, so that my paycheck would go in and we could pay everything from the USAA accounts
2. Open the new accounts – I called USAA and with one phone call was able to set up the initial checking and savings accounts, a joint personal credit card for my wife and I, and a separate credit card for my expenses while on the road. We also transferred our auto insurance from State Farm to USAA, which we did on the same call. All told it took about 20 minutes to get it all set up, and I was very happy with the experience
3. Switch Direct Deposit – USAA has a great “Switch Kit” which gives you everything you need to switch direct deposits and any other automatic withdrawals. So I sent everything to our HR administrator who made sure the direct deposit would be changed.
4. Setup Bill Pay – Probably the hardest part, since there isn’t really an automated way to move over all the payees. We focused on the ones that we pay out of the first paycheck cycle, and then moved over the rest once the first cycle had run.
5. Transferring Funds – What we did here was consolidate all of our BoA accounts into our main savings account, and then did a wire transfer to USAA. We had to pay $15 I believe for the transfer, but it was safe and secure – and fast. We did leave some money in our BoA accounts for the next section.
6. Monitoring the old accounts – We kept a little bit of money in our old accounts and monitored them closely for any automatic debits. There’s always something you forget – iTunes, automatic tolls, etc. As we saw them, we transferred them over. We did the same thing for our bills and watched for any automatic debits (life insurance, etc) and moved those over as well.
7. Closing out the accounts – Once everything had been up and running for about six weeks, we started closing down our old accounts. We started with the BB&T card I was using for my travel expenses, and my BoA Business Card. We had already closed out the savings accounts we had setup for the kids once they were moved over. We ended up leaving our auto loan and our mortgage with BoA, so we’ll still have accounts with them for a little while yet, but all of our banking is now through USAA!

For the pain I thought it was going to be, it was actually a fairly straightforward process. And seeing all the news stories of late around bank fee hikes ($20 a month for checking? Really?) I’m very glad we made the switch.