Switching to a better bank account

Almost every adult Canadian has a bank account, according to the Canadian Bankers Association. And there are practical reasons for that: most of us need a bank account to cover rent or mortgage payments, receive paycheques and to maintain our lifestyles. 

But what if you’re looking for a bank account with more perks? With 88 banks in the country, there’s enough choice out there for those who want to switch. But the process is time-consuming and, frankly, confusing. Where to start? If you’re looking to change banks, here’s how to switch without disruptions to your paycheque or recurring bill payments—and without a lot of stress for you.  

Decide where to move your money

First step: Figure out what you want from your new bank. It could be a more flexible chequing account with no fees on everyday transactions, a decent interest rate on savings, a rewards program or better customer service. (Scotiabank’s Ultimate Package*, for instance, offers all of the above, and waives up to $139 credit card fees each year.1) In the MoneySense ranking, Scotiabank is named best big bank for everyday banking, and also gets the nod for best student account, as well as best premium account for bundling.

Once you’ve narrowed down what you want, look at the features offered by various institutions. This is usually available on bank and credit union websites, so you can make a list of your must-haves and review it with each candidate. Take the time to read through customer reviews, and talk to your friends and family about what they like or dislike about their own financial institutions.

Make a list of all your automatic payments and deposits

Once you’ve identified and have picked your future bank, it’s time to make a list of all payments and debits that come out of your account automatically. (Don’t make this list from memory because you will forget something!) 

Look back at a year’s worth of your banking transactions to make sure you account for every single deposit and payment. (Some recurring payments are taken out annually versus monthly.)

Other deposits and payments to look for:

  • Canada Revenue Agency if you have direct deposits enabled for things like the Canada child benefit (CCB) or income tax refunds
  • CPP and other retirement benefits deposited to your account
  • Credit cards, if you have automated payments
  • Investment accounts

Make a note of each day of payment or deposit so you can go back and make sure there was no disruption during the switch.

Open your new account

These days you can open an account online, or you can take the appropriate COVID precautions and go into your new bank branch to open an account. 

If you choose the online route, here’s how: 

  • Open your new account online at least two weeks before you switch accounts. Most institutions offer clear instructions for how to do this on their website.
  • Have your identification documentation ready to go. Some banks will allow you to take and upload photos of your ID as part of opening a new account.
  • Deposit some money into your new account. This indicates your new account is active.
  • Once your new bank account is open, connect to your old bank account so you can transfer funds. 

Keep your old account open for a while

While you’re opening your new account, keep your old one open with enough money to cover any payments that are due during the transition. Don’t pay bills or do any debit transactions from your old account, but do keep it open for one or two months and monitor it.

Update your automatic transactions

Once you open your new bank account and transfer money into it, you should update your automatic payments and deposit list with your new banking information. Some you can switch yourself online, including any streaming services or virtual wallets, your iTunes account, and any food delivery apps or payment systems like PayPal. (This is why you needed that list!)

Don’t get overwhelmed by switching all your pre-authorized payments. Some banks, like Scotiabank, offer online tools that make it easy to switch everything over once you’ve opened your new account. You can quickly and easily switch over your existing pre-authorized bill payments through their online banking platform; all you need is the name of your service provider and your account number, both of which can be found on a recent bill. You can also set up recurring government payments, such as monthly pension cheques or annual tax returns, directly through online banking. 

To switch to your new account:

  • Have your list of service providers and associated account number or userid on hand
  • Have banking information for the old account on hand
  • Have banking information for the new account on hand
  • Choose a day where you don’t have any bills due; that way your payments won’t be disrupted

Some service providers, such as your workplace HR or payroll department, may need a new void cheque to switch automatic deposits to your new account. For that reason, it’s a good idea to ask them before you open your new bank account, so you can request temporary cheques or a direct deposit form. (In the latter case, you’ll need your new bank branch’s transit number and your new account number. A printable void cheque may also be available through online banking after you’ve opened the account.) 

Close your old bank account

Once you’re satisfied that everything has been switched and there is no more activity, you can officially close your old bank account. Make sure to contact your bank and ask for it to be closed. Ask if there are any closing fees and get confirmation in writing that the account has been closed; you don’t want a surprise monthly fee popping up a couple of months later.

And you’re done! 

Changing banks can bring a multitude of benefits. You can save more money, get a marginally higher interest rate, and get better service for your monthly fees. While it may take time to make the switch successfully, preparing that list makes it much easier, and ensuring you’re in the correct account for your needs will be worth it in the end!

Legal footnotes

1 Conditions apply. Visit www.scotiabank.com/ultimate300 to learn more.

The post Switching to a better bank account appeared first on MoneySense.

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