Is your current bank failing to keep pace with your business’s growth?
Perhaps its high merchant service fees are cutting into margins, restrictive loan rates are stunting your growth, or payroll processing services are a pain. These are just a few of the reasons businesses outgrow their banking partners.
Choosing a new bank that better aligns with your company’s needs can be a positive move. But changing banks requires careful planning to avoid cash flow disruptions and maintain business continuity.
Follow these steps to switch banks without a hitch:
- Find your new banking service
- Open your new bank account
- Make a list of automatic payments and deposits
- Move your cash and service payments to your new account
- Close your old bank account
- Enroll in online banking
1. Find your new banking service
The first step in switching banks is choosing your new business banking service. Options abound, so think about your business needs when researching potential banks or credit unions. Consider fees, rewards, customer service, must-have features, bank size and reputation, and the type of businesses they serve.
Specifically, you’ll want to look out for:
- Account, transaction, ATM, and overdraft fees
- Interest rates on savings and checking accounts
- Cash back on spending
- Favorable terms for loans and credit
- Minimum deposit or minimum balance requirements
- Branch locations and ATM network
- Business features like automatic bill payment or payroll services
- Online and mobile banking options
2. Open your new bank account
Many business banking services let you apply and open a bank account online. In addition to showing a government-issued photo ID and providing contact information, date of birth, and Social Security number, you’ll need to provide information about your business.
Specific requirements vary by bank or credit union, but here’s what you can generally expect:
Business information
- Employer identification number (EIN)
- Business name, trade name, or DBA name (if applicable)
- Business address and phone number
- Entity type (sole proprietorship, partnership, LLC, or corporation)
- Date your business was formed
- Industry and type of business you operate
Business entity documents
- Business license
- Sales tax license
- Articles of incorporation (for corporations)
- Articles of organization (for LLCs)
- Partnership agreement (for partnerships)
- Sole proprietorship business license (for sole proprietorships)
- DBA (doing business as) certificate (for fictitious names)
3. Make a list of automatic payments and deposits
As you switch banks, you’ll want to keep both accounts open until all pending transactions have cleared. Make a list of all electronic funds transfers (EFT) associated with the business so you don’t miss anything.
This includes:
- Automatic deposits:ACH deposits, government benefits, and any other payments that are automatically deposited to the account.
- Automatic bill payments: Recurring payments or ACH withdrawals for expenses like rent, utilities, credit cards, and other business-related bills.
- Recurring subscriptions: Auto payments for business software, memberships, or other business services.
- Recurring transfers: Any automatic transactions between business accounts, such as from your checking account to savings account, or from your business account to a retirement account or investment account.
- Linked accounts: Such as your personal bank account or a business credit card.
4. Move your cash and service payments to your new account
The next step in switching bank accounts for a business involves moving cash and service payments to the new account. Use the inventory list you made in the last step and begin moving the items over to your new account.
- Begin moving cash into the new account so you can make payments and earn interest.
- Edit the default bank account you use to receive payouts from Shopify Payments and any other institution that deposits money directly into your account.
- Update automatic payment information for services like insurance premiums, software subscriptions, and other online payments to make funds start coming out of the new account.
- Keep some money in the old account to maintain the minimum balance and cover any automatic payments or checks that haven’t cleared yet.
5. Close your old bank account
Once you’re sure all outstanding transactions have gone through, it’s time to officially close your old bank account. Before you do so, move any remaining cash to the new account and confirm that your balance is zero.
You may be able to request to close your bank account online, via written letter, or in person. Be prepared to provide identification or other verification for this request. After the closure, verify that the account has been officially closed (you should get a final bank statement from them). Review the statement to make sure nothing is lingering, and keep it as proof for three years.
At this point, you can also destroy any remaining checks or cards you have from the old bank.
6. Enroll in online banking
Now that your business bank account is switched over, get familiar with your new bank. Download the new bank’s mobile app and sign up for online banking.
Order debit and ATM cards. Connect your new bank account to your accounting software, such as QuickBooks or Xero. Finally, keep a close eye on your new account for at least one to two months to be sure all transactions are processing correctly, and make any necessary adjustments.
Open a business financial account with Shopify Balance
For a business financial account with all-in-one management, fast payouts, and zero fees, check out Shopify Balance. This free account is easy to open and integrate with your Shopify-powered business, since it’s built right into your Shopify admin.
With Shopify Balance, you can:
- Earn a 3.86% APY reward on the money in your account*
- Receive money from your Shopify sales up to seven days earlier than a bank
- Get a free physical and virtual Balance Visa® spending card
- Earn up to $2,000 cashback per calendar year on eligible purchases**
- Skip paying any monthly, transfer, or ATM fees***
- Enjoy no minimum balance requirement
- Organize your funds within up to five additional accounts
- Automatically set aside sales tax and sync transactions to your accounting software
- Track your business success with comprehensive dashboards, filters, and reports
- Manage your account on the go via the Shopify Balance mobile app
Switching banks FAQ
What is the best way to switch banks?
The best way to switch business banks involves several steps, for a smooth transition and to avoid costly mistakes:
- Research and compare banking options based on your business needs and banking features.
- Open the new account, making sure to gather all the needed business documentation.
- Prepare for the switch by taking inventory of all automated payments, deposits, and linked accounts.
- Move cash to the new account and update bank information for transactions like bill payments, direct deposit accounts, recurring software subscriptions, and Shopify payouts.
- Close the old account once all transactions have been completed and your account balance is zero.
- Enroll in online banking with your new bank and download their mobile app.
How can I change from one bank to another?
Changing from one bank to another starts with finding a bank that fits your needs, considering factors such as fees, services, and banking features.
Once you’ve chosen a new bank, open an account and start moving cash into it. Switch over all electronic payments, direct deposits, and withdrawals. Keep your old bank open and some cash in the account until all transactions have cleared.
Then, request account closure with the old bank and update your bank account information with all vendors, suppliers, credit cards, and auto payments. Finally, enroll in online banking with your new bank and request payment cards.
Is it difficult to switch banks?
Switching banks isn’t difficult, but it requires some planning and diligence to avoid any snags.
How do I transfer from my bank to another bank?
Switching to a new bank account involves a coordinated effort between your old and new accounts. First, research and choose a new bank that aligns with your needs and open an account there.
Next, inform your current bank of your intention to transfer and follow their closure procedures. Crucially, update all automatic payments and deposits to reference your new account details. Once rerouted, transfer any remaining balance and close your old account (after verifying all transactions clear). These steps will help you make a smooth switch with minimal disruption to your business operations.
Shopify partners with Stripe, Inc. and affiliated companies, and financial institution partners, including Evolve Bank & Trust, Member FDIC, and Celtic Bank, to offer money transmission, banking, and issuing services, respectively. The Shopify Balance card is issued by Celtic Bank pursuant to a license from Visa U.S.A. Inc.
* Shopify provides a reward in the form of an annual percentage yield (APY) on the money you hold in Shopify Balance, and it is not interest. The rate is variable and subject to change without notice. The reward accrues daily, and is compounded and paid monthly in the form of a credit to your Balance account.
** Earn up to $2,000 USD cashback on all eligible purchases per calendar year. Learn more.
*** Shopify Balance has no monthly, transfer, or hidden fees. Shopify doesn’t charge any ATM withdrawal fees, but you may be charged by an ATM provider.
