Two weeks ago we looked at choosing a small bank that would be a good fit for you and your money. Last week we looked at all the advantages of banking with a credit union. This week we are going to look at how to move our money, to a smaller more customer friendly bank.

Moving from a big bank to a little bank, if done wrong, can cost you hundreds of dollars, and lower credit score. If done right, the move will be relatively painless along with not have you paying any late or overdraft fees.

The best way to move from a big bank to a little bank is in stages. I have broke it down into 5 stages. That you will sure that the transition will be smooth and painless as possible.

Stage 1 - Open a checking account in the new bank or credit union, that you feel safe in putting your money into their hands. At this get your new debit cards, but don’t start using them until after Stage 2.

Stage 2 –  Notify your employer that you want to change your direct deposit to the new banks checking account. The process can span over a couple of pay day’s. It is important to know your are getting your money in the new bank before you start paying bills from that account.

Stage 3 – Once you know your pay check is getting put in the new bank account, now it is time to start paying your bills from the new account. I would recommend that you keep some money in the old account. This is to cover any automatic withdrawals that you may of have forgot.

Stage 4 - After payroll check is being deposited, and are bills being paid out of the new account, it is time to closed the old large banks checking account. I would recommend that the account has not shown any activity for at least 4 weeks. That way you are sure all automatic withdrawals have been transferred over.

Stage 5 – Take out the last remaining money from the old bank.  This is the time to move your savings account to the new bank.

Have you money you banking from one bank to another? Tell me about your experience?

Tags: Banking, Move Your Money