To switch banks in Canada, start by researching and choosing a new bank that better meets your financial needs. Either visit the institution's website or a local branch to open an account, and then start moving your financial assets and obligations to your new bank.
Key Takeaways
- To switch banks, research a new financial institution, make a list of pre-authorized debits and direct deposits, open a new account, transfer funds, set up automatic payments, and close your old account.
- Switching accounts within the same bank can be completed online or by contacting your bank directly.
- When changing banks, consider welcome bonuses, interest rates, fees, and minimum balance requirements offered by potential new banks.
Reasons to switch banks
People switch banks for a variety of reasons, such as looking for lower fees and financial incentives or wanting a better online experience.
Here are some of the most common reasons that people choose to switch:
- High fees: If you're paying high monthly fees or feel you're being overcharged by your current bank, shop around. Many banks offer low-fee or free bank accounts and/or bundle services together for a better fee. Online banks and credit unions tend to offer lower fees than traditional banks.
- Better interest rates: If a rival bank offers better interest on a savings account, hybrid account, or a high interest savings account, you may want to consider a switch
- Better online experience: If you don’t like your current bank’s online experience or financial app, or want more digital banking options (automatic payments, mobile cheque deposits, etc.) check out the competition for a smoother and more intuitive online banking experience.
- Better account options: If a bank is offering more robust financial services (investment products, personalized advice, etc.) at an equal or lower fee than what you current pay, switching institutions may be beneficial.
- Rewards or cash back: Some banks run promotions offering bonus points, cash back, or prizes (iPads, Fitbits, etc.) for switching over from the competition.
- Consolidating finances: If you get married or move in with a partner, you may want to consider opening a joint chequing account. It's an easy way to consolidate your finances and gives you a better view of your financial health, as opposed to managing accounts.
- Better customer service: The human touch is important, as are shorter waiting times. If you're not getting either of these from your current institution, switching banks may be the solution.
Switching banks can save you a lot of money in the long run, especially if you can negotiate lower fees and more services at your new bank. Moving banks can also get you better service and access to a wider variety of financial products.
How to pick a new bank or credit union
Aside from the reasons behind your choice to switch banks, think about how you manage your money when you actually decide which bank or financial institution to join.
Here are some things to think about:
- Chequing habits: If you send multiple Interac e-transfers per day, regularly transfer funds between accounts or people, or make multiple payments at once, a bank offering a chequing account with unlimited transfers and transactions might be worth considering.
- Savings goals: If you want to set up an emergency fund or build up funds for a big purchase, a competitive bank offer with a high interest savings is a valuable choice.
- Eyeing real estate: If owning property is your goal, a bank offering low mortgage rates is what you need.
- Rewards and perks: If a bank you are considering doesn’t have low fees, check out whether it provides rewards, cash back, or other service perks you'd find valuable.
How to switch banks
There are a few essential steps required to make a smooth banking transition, from identifying your new banking partner to transferring your financial activities:
- Identify which bank you want to switch to: The first step is to find a bank you want to work with and that provides financial products that fit your needs. Research different banks and their welcome bonuses for new clients, including waiving fees or high interest rates.
- Review and compile all your automatic transactions: Make a list of all your automatic bill payments, pre-authorized debits, direct deposits, etc. This will ensure you don't overlook any transactions during the transition period.
- Open your new account: Open the new account either in person, online, or over the phone. This process is usually simple and relatively quick.
- Transfer your funds: Transfer your funds electronically, by cash, or by cheque into your new account. You can also electronically link accounts together for an easier transfer of funds.
- Close your old account: Finally, you need to close your old account. Be sure to ask for written confirmation from the old bank once the account is officially closed, and destroy any linked debit cards or cheques.
Be prepared to verify your identity with original identification documents from a list of acceptable sources. You’ll need:
- One document showing your name and address
- Another showing your name and date of birth
Alternatively, a document confirming your name and birth date, along with verification from a reputable bank customer or community member is often acceptable.
How to switch bank accounts within the same bank
Switching accounts within the same bank is straightforward and usually only requires you to contact your bank and request the change from one account to another. This process can often be completed on the same day the request is made.
For select accounts, you may be able to make the change yourself online. Log into your online banking portal, look for the "Change Accounts" option, and follow the instructions from there.
You should be able to retain your account number and debit card.
Are there fees for switching banks?
Depending on your current bank, you may have to pay a fee to close an account when switching to a new bank. Here are some of the possible fees you may be charged:
- Closing fee
- Inactivity/dormancy fee
- Non-sufficient funds
- Overdraft fee
- Fee to transfer funds to a new bank
Will switching banks affect my credit score?
As long as your old account was in good standing, switching to a new bank shouldn't affect your credit score.
That said, there are a few circumstances wshere your score could be negatively affected during this process:
- You owe money to old your bank after you've switched to the new bank
- You cancel a credit card from your old bank – allowing the card to become dormant is a better choice
$75 GeniusCash + Unlimited transactions for $0 + Ding-free non-affiliated ATM usage.
$25 GeniusCash + $50 bonus for funding a new account, and $0 commissions on stocks & ETFs
$12 GeniusCash + Access trusted news coverage 24/7 + Digital and home subscription options.
$25 GeniusCash + Delicious meal choices with fresh ingredients + Front-door delivery.FAQ
How long does it take to switch bank accounts?
The time it takes to switch bank accounts can vary from a few minutes to a few days, depending whether you’re changing banks or staying with the same bank, and the complexity of the transactions you’re moving over.
Can I switch my mortgage to another bank?
You can switch your mortgage to another bank by starting a mortgage with the new bank when your old mortgage matures. You can also break your old mortgage and switch at any time, but you’ll pay significant fees.
What are the best deals for switching banks?
Many banks offer perks like promotional interest rates, waived fees, or welcome bonuses as incentives to switch. Some top offers currently available are for the BMO Performance Chequing Account and BMO Premium Chequing Account, offering up to $700 in cash.
Can I transfer my bank account to another bank in Canada?
Yes, you can do this, but you'll have to open a new account with the new financial institution to transfer your funds into. You cannot transfer the actual account from one bank to another – just the contents of the account.
How hard is it to switch banks in Canada?
No, it's not difficult. You'll need to decide on a bank and make a list of all transactions that should be transferred to your new account contact the new bank to open an account, and close the old one.
Leave a comment
Comments