How to Switch to a Credit Union From a Bank

Step-by-step guide to begin banking with a credit union.

The article may contain affiliate links from partners. Our reviews and opinions are our own. Learn how we make money to support our financial wellness mission.

Sharing is caring!

With these simple steps, you can easily switch to a credit union from a bank.

The ongoing conversation on which is better “a bank or a credit union” often leads into a “banks versus credit union” debate. Banks and credit unions are two types of financial institutions that offer similar products and services. The main differences between them are in the ownership and profit motives. Credit unions are non-profit financial cooperatives owned by member-owners.

Determine Which Credit Union Is Right for You

To determine which financial institution is best, know what products and services are needed by you. In some cases, a credit union will be the top choice over a bank and in other situations, a bank may actually be better. It all boils down to products and services, interest rates and fees, and convenient options.

For example, if you’re the in-person banking type, then branch accessibility is essential. You’ll need to find a credit union with a local branch. There are 1000s of credit unions across the United States. Both large and small. And chances are you’re eligible to join more than one.

All credit unions were founded with the same principles of people before profit and member-first service. But each credit union has its own unique culture, style, and operation. Some will suit you better than others.

In my situation, a larger credit union with 24-hour support and a mobile app is essential. I don’t need a local branch, I just need to be able to bank within the app. Some credit unions do this better than others.

  • Products offered based on products needed.
  • Services needed such as branch locations, ATM access, online, and mobile features.
  • Compare fees on accounts and services.
  • Determine how much technology or personal service you require to help you decide between a big bank, community bank, a large credit union, or a small local credit union.

Steps to switch to a credit union from a bank

Before deciding on switching from your bank to a credit union, do the following:

  1. Evaluate your current financial institution’s services. What type of relationship do you have with them? What fees are you paying? What do you like and absolutely hate? If you’re sticking around with a big bank because they are convenient but you haven’t stepped into a branch or used an ATM in months, it might be time to look for cheaper alternatives.
  2. Write down what you want. It’s important to know what you need such as a checking account and debit card for making purchases and paying bills. But, also know about the types of services you want like access to ATMs, online banking, mobile apps, and bill payment services you actually use.
  3. Go shopping. Once you know the services you have and the services you actually need it’s now time to shop around for the best alternative. Ask your employer, church, family, and friends about their credit union, visit MyCreditUnion.gov, or search our financial marketplace.
  4. Open your accounts. Start with a checking account and debit card. Make sure you’re aware of the new routing numbers and debit card information.
  5. Begin the transition. Change your direct deposit information with payroll and other companies that send you payments (i.e. side gig apps). Go online and input the new banking information for your automatic payments and withdrawals.
  6. Download your statements. Store your financial statements from the previous three years. In the event you’ll need to refer back to them for tax reasons, you have them saved. Alternatively, many banks will provide old statements to you for a fee.
  7. Keep your old bank accounts, for now. Until you’ve successfully transitioned your direct deposit and automatic withdrawals, it’s recommended to keep the account open. This can usually take 30-60 days. Make note of periodic withdrawals that happen once a quarter or annually. Be mindful of account fees for keeping an account open with no deposits.

Remember, many financial institutions understand it’s difficult to switch from one bank to another. They count on our unwillingness to change and simply stay put. This is why we continue to pay the fees and use subpar products and services. You have options and its important to use them.

Check out the financial marketplace for credit unions and non-traditional bank alternatives.

Jason Vitug

Jason is the founder of phroogal, creator of the award winning project Road to Financial Wellness, and author of the bestseller and New York Times reviewed book, You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.