By: Kara Perez
Updated: August 11, 2019
When did you open your first savings account? For some of us, it was when we were children and our parents opened custodial accounts for us. For others, maybe you went to college and a bank offered students a deal on a checking and savings account combination.
But as the years pass, the accounts we had as children or young adults might not work for us anymore. Whether you move from one state to another (or one city to another) or want to open a savings account with a partner, the time may come when you want to transfer your savings account.
Why You Might Need or Want to Transfer Your Savings Account
As you grow, your lifestyle will grow too. Things that worked a year or five years ago no longer do. That’s OK — change is a part of life! The important thing is to make changes that work for you, rather than against you.
Why might you need or want to transfer your savings account?
- You want to have a joint account with a romantic partner. You don’t have to be married to have a joint bank account with a partner; you can open one at any time in a relationship. When you do, you may want to transfer some or all of the savings in your old account to this new one.
- You’re moving states. Not all banks or credit unions operate on a national level. So if you move from Virginia to Oregon, you may find that your old bank simply doesn’t exist on the West Coast and you need to transfer your old accounts.
- You’re no longer a student. Lots of banks offer students free checking and savings accounts. Once you graduate, fees may come into play. Or it may be that the student accounts are the most basic offerings at the bank, and you’d like to change up your accounts to get the best interest rates and offers.
Thing to Consider in a New Account
Before you transfer any money anywhere, there are a few things to take into consideration.
- Interest rates. Ideally, you’d want your interest rate to be as high as possible. Inflation in the U.S. is usually in the 1–3% range. So you want your cash savings to at least break even with inflation. Otherwise you’ll lose a lot of value over the years. When you’re considering a new savings account, carefully look into the interest rates available.
- Bank vs. credit union. Credit unions and banks operate similarly, but they are two different institutions. Banks are for profit, while credit unions are nonprofits. Credit unions also usually have a type of member they are seeking: educators or public service employees, for example. You would be well served by looking into credit unions in your area to see if one can serve your needs. Typically credit unions also have lower fees than banks and an emphasis on customer service, though these will vary from community to community.
- Location. Are you in a city or town where you expect to stay for a long time? Or do you plan to move soon? This could impact your banking decision, since not all banks and credit unions operate across the country. Look into where all the locations are for the institution you choose. Or perhaps you don’t even need to have access to a brick-and-mortar location.
How to Transfer Your Savings Account
Transferring a savings account has several steps to it, but luckily none of them is too complicated. Here’s your to-do list:
- Find a new bank or credit union.
- Open a savings account with them and make the minimum deposit.
- Transfer your savings into the new account.
- Close the old account at your old bank or credit union.
Let’s break these down a little more.
Finding a new bank or credit union is probably the task that will take you the most time. Using our basic criteria above, find one that works best for your needs. Make sure to spend time comparing the fees of any new accounts as well!
Next up, open a new account with the institution you chose. This may require going down in person to sign some paperwork, or you may be able to do it online. Different banks have different requirements, so look into the requirements of the one you’ve chosen.
You’ll need to have your Social Security number and a form of ID, such as your driver license or passport. You also need to be able to make the minimum opening deposit, either in cash or by making an online transfer on the spot. Opening an account should take only about 30 minutes in person and could take even less time online.
Once the account has been opened, you are free to transfer your old savings into your new account. Again, you can do this either in person or online. If you have several savings accounts, you can transfer them all into one new account or into several accounts at your new institution.
Things to Keep in Mind
When you open a new bank account, you’re usually opening both a checking and a savings account. Most institutions like you to have a checking account as a place to receive income like your direct deposit.
Here’s something to make special note of: Most banks and credit unions have minimum amounts you need to keep in your savings accounts to not incur any fees. So when you’re transferring money out of those accounts, keep the minimum required balance in there until you’re totally ready to close the account down.
When you are ready to bid your accounts adieu for good, head down to your old bank in person and close them yourself. You’ll be able to withdraw your remaining funds in cash or possibly make the final transfers into your new account online.
Close your accounts in person if possible. This way, you have a record of the account being closed with a person and can get a hard copy printout of the closed accounts. You should also shred all the debit and credit cards associated with your old account.
Once all these steps have been taken, you’ve officially transferred your savings account! You should be able to enjoy the next step in your financial life knowing you’ve created an account that works best for you.