10/03/2011 06:32 pm ET | Updated Dec 03, 2011

Fed up With Fees? 5 Steps to Switch Your Bank

When Bank of America announced it will charge a $5 monthly fee for debit card use, consumers erupted with a torrent of angry words. Other banks have already begun implementing or testing similar fees: Wells Fargo begins testing a $3 monthly fee on Oct. 14 in Georgia, Nevada, New Mexico, Oregon and Washington; JPMorgan Chase is testing a $3 fee in Wisconsin; Regions Bank will impose a $3 fee beginning Oct. 1; and SunTrust is already charging a $5 monthly fee for using a debit card.

What can mad-as-hell bank customers do? Switch banks. Most consumers don't change banks because of the hassle involved. These new fees, though, may get them on their feet.

Some banks have "switch kits" online to make moving your checking or savings account to their bank a simple process. But if you want to take your business to a bank that doesn't have a kit, the task is still not too difficult. Follow these five steps to make a smooth transition to a bank with lower fees.

1. Choose your new bank

If reducing fees is your top priority, take note of all the different types that may be triggered by everyday bank transactions or services. These include not only debit card fees but also monthly maintenance fees and overdraft fees. (The most recent bank fee survey showed that the average monthly maintenance fee for checking accounts can take a hefty $141 out of your balance each year.) You'll also want to be sure your new bank has a convenient network of ATMs so that you don't have to pay out-of-network fees, which can run as high as $4 or $5.

You can search to find both online and brick-and-mortar checking accounts. Then compare the details of each account: What is the minimum balance to avoid monthly fees? Is the online bill payment platform easy to use? Are there charges for paper statements or copies of checks?

As for your old bank, find out if there is a charge for closing the account. If your account has been open longer than three or six months, the bank most likely does not charge a fee.

2. Open the new bank account

Once you've chosen your new bank, you need to open the new account before you close the old one. First, you'll need identification. Most banks will accept these forms of ID:

  • Valid photo ID, such as a driver's license or passport
  • Social Security number or alien registration number
  • Proof of address, such as a utility bill

You'll also need to fund your new account with some amount of money. To do an electronic funds transfer (EFT), you will have to supply your old account number and bank routing number. These are the numbers printed on the bottom-left corner of your checks.

3. Change your direct deposit

Most people use direct deposit for their paychecks or Social Security checks. To make sure those funds arrive in your new bank account, you'll have to fill out the proper forms. Again, you'll need the new bank's nine-digit routing number and your new checking or savings account number.

4. Check that your old checks have cleared

While you're in the process of switching banks, you'll have to keep an eye of the checks you've written on the old account. Do not close your old account until all checks have cleared -- otherwise you'll wind up with a non-sufficient funds fee.

5. Make sure automatic payments stay on autopilot

According to Fiserv, a financial technology company, 31.5 million consumers had their bills automatically debited from their bank accounts in 2010. If you pay many of your bills automatically, you'll need to change these payments. And it goes the other way too: If you have money automatically deposited into savings accounts or money market accounts, you'll need to set up those deposits to go to your new bank.

Just as with outstanding checks, be sure to keep enough money in the old account to cover any electronic payments you need to make before the new bank account is up and running.

You can finally close your old account after all of the checks from that account have cleared and the automatic payments and deposits have been set up for the new account. Happy banking!