Is your current bank unable to accommodate the growth of your business?
Perhaps high merchant service fees are eating into profits, restrictive lending rates are stifling growth, or payroll processing services are cumbersome — these are just a few of the reasons why companies outgrow their banking partners.
Choosing a new bank that better suits your company’s needs can be a good move, but changing banks requires careful planning to avoid disruptions to cash flow and maintain business continuity.
To switch banks without any issues, follow these steps:
- Discover new banking services
- Open a new bank account
- Create an automatic payment and deposit list
- Transfer your cash and service payments to a new account
- Close your old bank account
- Enroll in Online Banking
1. Find new banking services
The first step in switching banks is Choosing a New Business Banking ServiceThere are plenty of options, so when considering banks and credit unions, think about your business needs: fees, benefits, customer service, must-have features, the size and reputation of the bank, and the type of business they serve.
Specifically, please note the following:
- Account fees, transaction fees, ATM fees, overdraft fees
- Regular and current account interest rates
- Cashback on your spending
- Favorable terms for financing and credit
- Minimum deposit or balance requirements
- Branch locations and ATM network
- Business features like automated bill payment and payroll services
- Online and mobile banking options
2. Open a new bank account
many Business Banking The service allows you to apply for and open a bank account online. You’ll need to provide a government-issued photo ID, contact information, date of birth, and Social Security number, as well as information about your business.
Specific requirements will vary by bank or credit union, but in general you can expect the following:
Business Information
- Employer Identification Number (EIN)
- Company, trade, or DBA name (if applicable)
- Business address and phone number
- Legal entity type (sole proprietorship, partnership, LLC, corporation)
- Company Establishment Date
- Business type and industry
Business Entity Documents
- Business license
- Sales Tax License
- Articles of incorporation (if a corporation)
- Articles of Organization (LLC)
- Partnership agreement (in the case of a partnership)
- Personal business license (for sole proprietors)
- DBA (business name) certificate (if using a fictitious name)
3. Create an automatic payment and deposit list
When switching banks, keep both accounts open until all pending transactions are completed. Electronic Funds Transfer (EFT) This is to ensure that you do not miss any information related to your business.
This one:
- Automatic Receipts:ACH Depositsgovernment benefits, and other payments automatically deposited into your account.
- Automatic Bill Payment: Recurring payments or ACH Withdrawals This will cover expenses such as rent, utilities, credit cards, and other business-related bills.
- Subscriptions: Automatic payments for business software, memberships, and other business services.
- Regular remittance: Automated transactions between business accounts, such as from a checking account to a savings account, or from a business account to a retirement or investment account.
- Linked Accounts: Personal bank accounts, business credit cards, etc.
4. Transfer your cash and service fees to a new account
The next step in switching your business bank account is to transfer your cash and service payments to the new account. Using the inventory list you created in the last step, begin transferring items into your new account.
- Make your payments and start moving cash into your new account so you can earn interest.
- Edit your default bank account Used to receive payments Shopify Payments and other institutions that deposit funds directly into your account.
- Update automatic payment information for insurance premiums, software subscriptions, and other services. Online Payment Allow the funds to be withdrawn from the new account.
- Leave some money in the old account to maintain a minimum balance and to cover any automatic payments or checks that have not yet cleared.
5. Close your old bank accounts
Once you’ve verified that all outstanding transactions are completed, officially close your old bank account. Before closing, transfer any remaining cash into your new account and ensure that the balance is zero.
You may be able to apply to close your bank account online, in writing, or in person. Be sure to bring your ID or other proof with you to the application. Once closed, make sure your account is officially closed (you should receive a final notice). Bank Statements Review your statements to ensure nothing is left behind and keep them as evidence for three years.
At this point you can also destroy any checks or cards you have left over from your old bank.
6. Enroll in online banking
Once you’ve completed the switch of your business bank account, familiarize yourself with your new bank: Download your 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, monitor your new account closely for at least a month or two to ensure all transactions are processing correctly and make any necessary adjustments.
Open a business financing account with Shopify Balance
If you’re looking for a business finance account with all-in-one management, fast payments and no fees, look no further. Shopify BalanceThis free account is built into your Shopify admin, making it easy to set up and integrate with your Shopify-powered business.
With Shopify Balance, you can:
- Earn 3.86% APR on the money in your account*
- Get your Shopify sales funds up to 7 days faster than your bank
- Get your free physical and virtual Balance Visa® Spending Card
- Earn up to $2,000 Cashback per calendar year on eligible purchases**
- Skip monthly fees, transfer fees and ATM fees***
- No minimum balance requirement
- Organize your funds with up to 5 additional accounts
- Automatically deduct 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 with the Shopify Balance mobile app
Bank switching FAQs
What’s the best way to switch banks?
The best way to switch business banks is to take a few steps to ensure a smooth transition and avoid costly mistakes.
- Research and compare banking options based on your business needs and banking features.
- Gather all the necessary business documents and open your new account.
- Take inventory of all your auto payments, deposits, and linked accounts to prepare for the switch.
- Move your cash to your new account and update your banking details for transactions like bill payments, direct debits, recurring software subscriptions, and Shopify payments.
- Once all transactions are complete and the account balance is zero, close the old account.
- Sign up for your new bank’s online banking and download their mobile app.
How do I change banks?
Switching from one bank to another starts with finding a bank that fits your needs, considering factors like fees, services, and banking features.
Once you’ve picked a new bank, open an account and start transferring your cash over. Switch over all your electronic payments, direct deposits, and withdrawals. Keep your old bank account open and keep some cash in the account until all your transactions are complete.
Next, request that your accounts with your old bank be closed and update your bank account information for all vendors, suppliers, credit cards, and auto-payments. Finally, enroll in online banking with your new bank and request a payment card.
Is it hard to switch banks?
Switching banks isn’t difficult, but it does require some planning and care to avoid problems.
How do I transfer money from my bank to another?
Switching to a new bank account requires reconciling your old and new accounts. First, research and choose a new bank that meets your needs and open an account there.
Next, notify your current bank of your intention to transfer your account and go through the process of closing the account. It’s important to update all automatic payments and deposits to reference your new account details. Once rerouted, transfer your balance and close the old account (after making sure all transactions have cleared). These steps will help you make a smooth transition with minimal disruption to your business operations.
Shopify has partnered with financial institution partners, including Stripe, Inc. and its affiliates, Evolve Bank & Trust, Member FDIC, and Celtic Bank, to provide payments, banking, and issuance services, respectively. The Shopify Balance Card is issued by Celtic Bank pursuant to a license from Visa USA Inc.
* Shopify offers rewards in the form of an Annual Percentage Yield (APY) on funds held in your Shopify Balance, which is not interest. Interest rates are variable and subject to change without notice. Rewards are accrued and compounded daily, and paid out monthly in the form of a credit to your Balance account.
** Earn up to $2,000 USD Cash Back on all eligible purchases each calendar year. Learn more here.
*** Shopify Balance has no monthly fees, transfer fees, or hidden charges. Shopify doesn’t charge ATM withdrawal fees, but your ATM provider may charge you fees.
