ow often have you changed your cell phone number?
If you're like me, the answer is never -- because even if you've physically swapped area codes a few times, retaining your original number avoids hassle and confusion. It would be difficult to switch it at this point.
I bet there's a good chance you feel the same way about your checking account. Maybe you signed up for it because of geographic convenience, or at least whatever was convenient a decade ago. Convenience isn't bad when it comes to banks, but if your lifestyle has changed since then or you'd like your dollars to go further, you may want to start looking around.
Why you might want to switch
I've switched bank accounts twice in the past five years. The first switch was from one large national bank to another, mainly to earn a cash sign-up offer I'd received in the mail, but also because the new bank was closer to my house at the time.
About a year later, I realized I never visited the branch, was tired of paying ATM fees and wanted to earn higher interest yields on my money, so I switched to an online bank, which I've been super happy with.
Here are a few reasons switching might make sense for you:
For a better lifestyle match: Perhaps you've moved or are interested in features your current bank doesn't offer. Some people value physical proximity to a bank; others, online or mobile access. Some care about ATM access, bill pay, phone support or automated savings; there's a world of options out there, so find the right fit.
To avoid fees: If you're paying fees regularly with your bank, that's a sign something is wrong. You can avoid overdraft fees -- some of the steepest fees banks charge -- by adjusting your budgeting approach and your overdraft preferences. But you can also explore the market. There are many great banking options that have low or no maintenance or account fees.
To get better returns: If you're willing to switch to online banks or credit unions, your money could be earning higher returns, even in checking accounts. Some checking accounts are offering annual percentage yields over 0.5%, and some savings accounts offer more than 1% APY.
For quick cash: A few banks offer cash sign-up bonuses for opening and maintaining a new account, ranging from $50 to $200 for a new checking account. I wouldn't switch banks purely for the cash -- because of the effort required and the potential conditions for the money -- but it can certainly sweeten the deal.
How to make the switch
Switching bank accounts can be tricky and time-consuming. It requires planning to ensure money lands where you need it and is available to pay your bills throughout the transition. To avoid bounced checks, fees or other headaches, take the time to do it right.
1. Before you make any move, note every regular transaction that goes in and out of your current account. Go back through at least six months of account statements to make sure you're not missing anything, including direct deposits, utility bills, credit card payments, etc.
2. Open the new account. This might take a week or two, depending on the bank.
3. Fund the new account. Move some cash from your current account to the new one to get started, or change your direct deposit to your new bank account. Then wait until the first paycheck appears in the new account.
4. As soon as the direct deposit is lined up with the new account, start moving all of your bills there and update any auto-pays. Don't delay. You could face pricey overdraft fees if you don't have enough money in your original bank to cover those bills.
5. Wait a month or so before closing your old account to ensure you haven't missed anything. Then visit the old bank or call a customer service rep to close it out, and they'll write you a check for any outstanding balance. To play it safe, you might even ask for written confirmation that the account has been closed.
Switching bank accounts can help you more easily manage your money -- and in some cases, it can even earn you more of it. Just make sure to do your homework so that the switch is as painless as possible.
Photo courtesy of NerdWallet
Sean McQuay is a credit and banking expert at NerdWallet. A former strategist with Visa, McQuay now helps consumers use their credit cards and banking products more effectively. If you have a question, shoot him an email at firstname.lastname@example.org. The answer might show up in a future column.