SoFi

About 25.6 million Americans made a move in 2023, which amounts to 7.8% of the country’s population. As you may be aware, a move can be expensive. Current estimates reveal that a local move for the contents of a three-bedroom home costs approximately $2,200, while a long-distance move is easily twice that. What’s more, amid the chaos of purging and packing, it’s easy to forget some of the moving-related costs you might face.

To help you get organized and budget appropriately, read on for the full story.

Understanding Moving Expenses

While it may not be as fun as, say, budgeting for a wedding, figuring out costs for moving can be similarly complex. There can be numerous aspects to wrangle, from purchasing the proper packing supplies, to deciding whether to DIY your move or hire professionals, to understanding insurance needs. Consider the following.

Types of Moving Expenses

Here are some of the costs you are likely to incur when moving:

•  Transportation, or actually moving your possessions from point A to point B

•  Moving services, meaning having professionals load, transport, and unload your belongings

•  Packing, which usually involves cartons and bubble wrap (or you might pay to have movers pack delicate or valuable items)

•  Insurance to cover the value of your belongings as they are transported

•  Rent and security deposits. The location you’re moving to may require a security deposit and first month’s rent in advance.

•  Cleaning fees. You may have to pay to have your former and new residences cleaned.

•  Lodging. As you travel from your former home to your new place, you may have to stay a number of nights in a hotel or motel. Some people need to bridge the gap between homes with a short-term rental as well.

•  Storage. You might have to put some items in storage, depending on the timing and specifics of your move.

•  New furniture and appliances. Often, when people move, they discover they need to buy new pieces, whether that means window shades, a fridge, rugs, or a dining table.

Factors That Affect Moving Costs

There are numerous variables when you move, but here are a few key ones to consider:

•  How far you are moving. A move across town will involve less time, effort, and expense than a move across the country (or overseas).

•  How much you are moving. If you are a recent college graduate with just a few pieces of furniture, your move is likely to cost less than, say, a family of four packing up their whole home (basement and attic including) and relocating.

•  Time of year. Summer tends to be the busy season, with students leaving school and finding new places to settle and families wanting to get to their new house before the school year starts. This increased demand can increase prices.

•  Services needed. If you are going to pack the contents of your studio apartment and have a friend with a van to help you move, you’ll likely spend considerably less than you will if you are a family of four who wants movers to pack and transport all your furniture and other items.

•  Storage. If you have to store all your possessions for a couple of weeks before you can have access to your new place, those costs can add up.

•  Access to locations. Someone whose move involves a single-level home with an ample driveway will likely have a shorter move than someone who lives in a 20th-floor apartment on a crowded city block. And shorter moves are less expensive than longer ones.

How to Create a Moving Budget

Once you know when and where you are moving, you can map out a moving budget.

•  Take inventory of what you want to move. Consider clothes, contents of your kitchen and bathroom(s), items stored in closets, and belongings in the attic, basement, and garage, if applicable. This will help you determine how big a truck you need and how much packing material you need.

•  Unless you’re planning to DIY your move, get multiple quotes from movers and carefully check reviews for the key contenders.

•  Don’t forget to add in line items such as packing materials, insurance, storage, and your daily expenses as you move.

•  Assess transportation and lodging costs as you move, plus pet boarding expenses, if needed.

•  Calculate the costs of getting settled in your new home: Rent, security deposit, new furnishings, cleaning fees, and so forth.

Once you have all the potential costs tallied, you can consider how to allocate funds to cover these expenses. Since moving costs can add up, you might want to think about ways to avoid putting the charges on a high-interest credit card.

Cost of Hiring Professional Movers

Next, take a closer look at one of the biggest expenses of moving: the cost of hiring a professional team to get you to your new home.

Average Cost of Hiring Movers

As you might guess, the cost of hiring movers can range widely depending on location, distance of the move, and how much you’re moving. Here are some general figures to be aware of:

•  For a local move (meaning 100 miles or less), costs typically range from $800 to $2,500.

•  For a long-distance move (more than 100 miles), costs are usually considerably higher, ranging from $2,200 to $5,700.

There can be additional fees to consider: extra insurance for valuable items, the cost of packing and moving supplies, the fee for professional packing of items, and special services for moving items like, say, a piano or a pool table. You may also want to calculate how much tipping your movers might cost; omitting that expense could be a budgeting mistake. Recommendations typically say between 10% and 20% of the cost of your move is appropriate.

Recommended: Personal Loan vs Credit Card: What’s the Better Option?

Tips for Saving Money on Professional Movers

As you contemplate moving and how much it will cost, you may want to try various ways to keep the price down:

•  Declutter before your move. The less stuff you have, the less packing materials you’ll need and the faster (and cheaper) your move will be.

•  Pack what you can. While valuable art or a prized guitar may not be good candidates for packing yourself, you can likely save money by packing, say, your clothes in your suitcases and duffel bags vs. paying a professional to do the job.

•  Move during the off-season. There’s less demand during seasons other than summer, so you might get a better deal.

While of course you want to stick to your budget, keep in mind that the cheapest quote for moving may not be the best option. A moving company’s reputation for safe, on-time services can matter more than a rock-bottom price.

DIY Moving: Budgeting and Expenses

Thinking of doing your own move? Consider these aspects:

•  The cost of renting a truck or van will require funding. As you might guess, the bigger the truck and the longer you use it, the more costly it will be. According to Angi.com, renting a truck can cost between $20 and $100 a day for a local move, but a long-distance move can incur charges of $300 to $2,000 or more a day. The average cost in the U.S. is about $1,000. (Keep in mind that you need to resolve what happens to a truck that you might drive cross-country to move. Can you drop it off at a location near your new home, or will you have to pay a fee for its return to its home base?

•  You’ll also need to budget for packing materials. Online packing calculators can help you determine your needs and the cost, but estimates say that for a small-to-medium home (a two-bedroom apartment or house), you’ll likely need to spend at least a couple hundred dollars on cartons, not including such supplies as bubble wrap ($2 for 10 feet) and tape ($2.50 and up per roll). Don’t forget some sturdy markers to help you label what’s inside each box.

•  You might rent reusable boxes (typically plastic ones) to use for your move. Another item that can be wise to rent is wardrobe boxes, which allow you to move clothing that’s hanging in your closet into these boxes for easy transportation.

•  Moving blankets are another expense. These can cost $10 and up a pop if you purchase them. You may be able to rent them from a moving company to use for your DIY move.

•  Don’t forget about dollies and hand trucks to get boxes from one location to another.

Recommended: Personal Loan Calculator

Hidden Moving Costs to Be Aware Of

As you get ready to move, don’t overlook these costs (some of which were mentioned above):

•  Storage costs for any items that need to be held securely before they can be moved into your new home. You might easily pay between $100 and $300 a month for this service. You also might need to pay insurance fees to protect your items.

•  Any temporary housing you may need

•  Transportation costs. You may be in a situation in which you fly cross-country but need to ship your car (the average cost of shipping a car is $1,650). Or maybe you’ll drive, triggering gas, lodging, and road food costs.

•  If you’re moving to a different state and have a car, you’ll need to apply for a new license and register your car with the local DMV, which can wind up costing a couple hundred dollars. That’s another item to add to your moving expenses checklist.

•  You will likely need to update documents and do a significant amount of address changing for all your online and other accounts. You might face some delays in receiving payments (such as passive income), so that is worth considering in advance as well.

•  Security deposit and first month’s rent, if applicable, at your new place. Also utilities setup and any transfer fees; locks and smoke and carbon monoxide detectors

•  Stocking your kitchen at your new home (pantry and grocery expenses are not insignificant)

Tips for Reducing Moving Expenses

Here are some ways you can bring down your moving costs (some were already referenced above):

•  Downsize as much as you can before moving. The less you have, the faster and cheaper your move can be.

•  Find affordable or free moving materials. Options can include getting free cartons and other supplies from friends and family, sourcing boxes from local retailers, or renting things like plastic containers, wardrobes, and moving blankets vs. purchasing them.

•  Schedule your move appropriately, avoiding the busy and pricey summer high season.

•  Check the Internal Revenue Service’s allowable tax deductions and reimbursements for moving. The IRS website shares details of what you might qualify for.

Planning for Additional Moving Expenses

Part of the goal of this planning is to help you avoid putting many of these potential charges on your credit card, since they typically charge high interest rates. Maybe you can dip into funds held on reserve: That’s what emergency savings are for.

You can also use a 0% interest credit card, crowdsource from friends and family, or consider a personal loan.

Personal loans are a form of installment debt, where you receive a lump sum that you then repay in equal monthly payments. There are different types of personal loans, so you can choose the terms that best fit your budget and circumstances.

Believe it or not, moving expenses are one of the most common uses for personal loans. And because of their relatively low fixed rates compared to high-interest credit cards, you can roll in related new-home expenses like new furniture and painting.

Recommended: Get Your Personal Loan Approved

The Takeaway

Moving is a major financial commitment, but it doesn’t have to break the bank. When planning a move, first decide whether you’re going to DIY or hire pros. Then make a list of other expenses: packing supplies, funds for a security deposit at your new place, and new furniture and household items. You may need to tap your savings or take out a personal loan to afford these charges.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What are the typical costs associated with moving?

A local move (meaning less than 100 miles) can cost from $800 to $2,500, while a long-distance move can cost a couple of thousand dollars and up. Costs include professional movers or truck rental, packing supplies, transportation to your new location, possibly lodging, and costs such as a security deposit and new vehicle registration at your new home.

What is a reasonable amount for moving expenses?

There is no one figure that’s reasonable for moving expenses. The amount of possessions you need to move, how far you are moving, and when you are moving are among the factors that matter. It can also impact costs if you hire professional movers vs. doing it yourself. In general, a move can easily cost at least one or two thousand.

What are ways to lower the cost of moving?

To lower the cost of moving, you might do the move yourself with friends and family, source free boxes from local retailers, and declutter before you move, not after.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q424-053

There are seven federal tax brackets for the 2024 tax year, ranging from 10% to 37%. As a general rule, the more you earn, the higher your tax rate. And the higher your income and tax rate, the more money you will probably owe the IRS (Internal Revenue Service) in taxes.

How much you’ll pay in federal tax on your 2024 income (due in 2025) will depend on which bracket your income falls in, as well as your tax-filing status and other factors, such as deductions.

When people look at tax charts, however, they often assume that having an income in a particular tax bracket (such as 22%) means that all of your income is taxed at that rate. Actually, tax brackets are “marginal.” This term means that only the part of your income within each range is taxed at the corresponding tax rate.

Read on to learn more about this at times complicated topic, including answers to these questions:

•   Which tax bracket am I in?

•   How can I use the 2024 tax chart to figure out how much I will owe?

•   What are some tips to lower my tax bracket?

What Are Tax Brackets?

A tax bracket determines the range of incomes upon which a certain income tax rate is applied. America’s federal government uses a progressive tax system: Filers with lower incomes pay lower tax rates, and those with higher incomes pay higher tax rates.

There are currently seven tax brackets in the US which range from 10% to 37%, as briefly noted above. However, not all of your income will necessarily be taxed at a single rate. Even if you know the answer to “What is my federal tax bracket?” you are likely to pay multiple rates. Read on to learn more about how exactly this works.

Also note that the income levels have been adjusted in 2024 vs. 2023 to take into account the impact of inflation and other factors. So even if you made the same amount in 2024 as in 2023, you are not necessarily in the same bracket again. It’s important to note these changes.

How Do Tax Brackets Work?

Whether you’re filing taxes for the first time or have been doing so for decades, you may wonder how you know what tax bracket you’re in.

While there are seven basic tax brackets, your income doesn’t necessarily get grouped into one level in which you pay that rate on all of your income. This only happens if your total income is in the lowest possible tax bracket.

Otherwise, the tax system is also graduated in such a way so that taxpayers don’t pay the same rate on every dollar earned. Instead, you pay higher rates on each dollar that exceeds a certain threshold.

•   For example, if your taxable income is $50,000 for 2024, not all of it is taxed at the 22% rate that includes incomes from $47,150 to $100,525 for single filers. Some of your income will be taxed at the lower tax brackets, 10% and 12%. Below, you’ll find a specific example of how this works.

In addition to knowing which tax bracket you’re in, it’s important to be aware of standard deductions that are applied when calculating taxes. (This is separate from common payroll deductions, such as health insurance.) The standard deduction will lower your taxes owed.

For income earned in 2024, the standard deduction is $14,600 for unmarried people and for those who are married, filing separately; $29,200 for those married, filing jointly; $21,900 for heads of household. (There may be tax benefits to marriage beyond your bracket, by the way.)

There are additional deductions that may lower your taxable income, too, such as earmarking certain funds for retirement.

In addition to federal taxes, filers may also need to pay state income tax. The rate you will pay for state tax will depend on the state you live in. Some states also have brackets and a progressive rate. You may also need to pay local/city taxes.

Example of Tax Brackets

According to the 2024 tax brackets (the ones you’ll use when you file in 2025), an unmarried person earning $50,000 would pay:

10% on the first $11,600, or $1,160
12% on the next $35,550 ($47,150 – $11,600 = $35,550, or $4,266
22% on the next $2,850 ($50,000 – $47,150 = $2,850), or $627
Total federal tax due would be $1,160 + $4,266 + $627, or $6,053

This doesn’t take into account any deductions. Many Americans take the standard deduction (rather than itemize their deductions).

2024 Tax Brackets

Below are the tax rates for the 2025 filing season. Dollar amounts represent taxable income earned in 2024. Your taxable income is what you get when you take all of the money you’ve earned and subtract all of the tax deductions you’re eligible for.

Not sure of your filing status? This interactive IRS quiz can help you determine the correct status. If you qualify for more than one, it tells you which one will result in the lowest tax bill.

2024 Tax Brackets For Unmarried People

According to the IRS, for tax year 2024, there is a tax rate of:

•   10% for people earning $0 to $11,600

•   12% for people earning $11,601 to $47,150

•   22% for people earning $47,151 to $100,525

•   24% for people earning $100,526 to $191,950

•   32% for people earning $191,951 to $243,725

•   35% for people earning $243,726 to $609,350

•   37% for people earning $609,351 or more

2024 Tax Brackets For Married People Who Are Filing Jointly

Tax rate of:

•   10% for people earning $0 to $23,200

•   12% for people earning $23,201 to $94,300

•   22% for people earning $94,301 to $201,050

•   24% for people earning $201,051 to $383,900

•   32% for people earning $383,901 to $487,450

•   35% for people earning $487,451 to $731,200

•   37% for people earning $731,201 or more

2024 Tax Brackets For Married People Who Are Filing Separately

Tax rate of:

•   10% for people earning $0 to $11,600

•   12% for people earning $11,601 to $47,150

•   22% for people earning $47,151 to $100,525

•   24% for people earning $100,526 to $191,950

•   32% for people earning $191,951 to $243,725

•   35% for people earning $243,726 to $365,600

•   37% for people earning $365,601 or more

2024 Tax Brackets For Heads of Household

Tax rate of:

•   10% for people earning $0 to $16,550

•   12% for people earning $16,551 to $63,100

•   22% for people earning $63,101 to $100,500

•   24% for people earning $100,501 to $191,950

•   32% for people earning $191,951 to $243,700

•   35% for people earning $243,701 to $609,350

•   37% for people earning $609,351 or more

Recommended: How Income Tax Withholding Works

Lowering Your 2024 Tax Bracket

You may be able to lower your income into another bracket (especially if your taxable income falls right on the cut-off points between two brackets) by taking tax deductions.

•   Tax deductions lower how much of your income is subject to taxes. Generally, deductions lower your taxable income by the percentage of your highest federal income tax bracket. So if you fall into the 22% tax bracket, a $1,000 deduction would save you $220.

•   Tax credits, such as the earned income tax credit, or child tax credit, can also reduce how you pay Uncle Sam but not by putting you in a lower tax bracket.

Tax credits reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. A tax credit valued at $1,000, for instance, lowers your total tax bill by $1,000.

Many people choose to take the standard deduction, but a tax expert can help you figure out if you’d be better off itemizing deductions, such as your mortgage interest, medical expenses, and state and local taxes.

Whether you take the standard deduction or itemize, here are some additional ways you may be able to lower your tax bracket as you think ahead and prepare for tax season:

•   Delaying income. For example, if you freelance, you might consider waiting to bill for services performed near the end of 2024 until early in 2025.

•   Making contributions to certain tax-advantaged accounts, such as health savings accounts and retirement funds, keeping in mind that there are annual contribution limits.

•   Deducting some of your student loan interest. Depending on your income, you may be able to deduct up to $2,500 in student loan interest paid in 2024.

It can be a good idea to work with a CPA (certified public accountant) or tax advisor to see if you qualify for these and other ways to lower your tax bracket.

Recommended: 10 Personal Finance Basics

The Takeaway

The government decides how much tax you owe by dividing your taxable income into seven chunks, also known as federal tax brackets, and each chunk gets taxed at the corresponding tax rate, from 10% to 37%.

The benefit of a progressive tax system is that no matter which bracket you’re in, you won’t pay that tax rate on your entire income. If you think you might get hit with a sizable tax bill, you may want to look into changing your paycheck withholdings or, if you’re a freelancer, making quarterly estimated tax payments.

You may also want to start putting some “tax money” aside each month, so you won’t have to scramble to pay any taxes owed when you file in April. An interest-bearing checking and savings account could be a good option for this purpose.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Has anything changed from 2023 to 2024 tax brackets?

Yes, the IRS has adjusted tax brackets for tax year 2024 to reflect the impact of inflation and other factors.

What is a marginal tax rate?

The marginal tax rate refers to the highest tax bracket that you possibly fall into. However, your effective tax rate averages the taxes you owe on all of your income earned. For this reason, your effective tax rate will likely be lower than your marginal rate.

How do deductions affect your tax bracket?

Deductions lower your taxable income. The more deductions that are taken, the more of your earnings are taxed at reduced brackets.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

3.80% APY
0.50% APY

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOBK1223002

Switching banks doesn’t have to be a difficult process, and it can benefit your financial health. For instance, one reason you might make a change is to earn a more favorable interest rate or pay lower (or no fees). Or you might get a sign-up bonus at a new financial institution. There might be other reasons to switch banks, such as finding one with branches or ATMs that are more convenient to your daily life or one that offers other financial services you are seeking.

While changing banks isn’t usually an instantaneous process, here are the simple steps to follow to make the switch as quickly and easily as possible.

How to Switch Banks in 6 Steps

If you think changing banks is the right path for you, here are the six steps that can make it happen.

Step 1. Research and Find a New Bank

Identify the key benefits you want but currently don’t have and do an online search to compare options. Here are some points to consider as you evaluate options:

•   Interest rates earned on money on deposit. For instance, you might want to look for a high-yield savings account to help your money grow. These can offer several times the interest rate of standard savings accounts. Also, some checking accounts may pay interest, though most do not.

•   Minimum deposit and balance requirements. Certain accounts require you to open the account with a particular sum of money and/or keep an amount on deposit to earn a specific interest rate and/or avoid fees.

•   Fees assessed for accounts. There can be various fees that can eat away at your money, such as monthly maintenance fees, overdraft and NSF (non-sufficient funds) fees, out-of-network-fees, and more.

•   Convenience. If you want a traditional vs. online bank, make sure the branches are near your home and work. Also, if you use ATMs often, check to make sure in-network machines are easily accessible. If you travel frequently, look at the reach of the financial institution’s network.

•   Customer service. Read reputable online reviews and check availability (24/7? Only on weekdays?) for customer support.

•   If you are planning to buy a home soon, you might want to bank with an institution that also offers mortgages to streamline that process. Or you might prefer a bank where you can access personal financial and investing services. Consider your needs carefully.

Step 2: Open a New Account

Found a new home for your cash? Go and open that checking account to get started. You can typically fill out the information needed online, in the bank’s app, or (with traditional banks) in person. Here’s what you will usually need:

•   Valid ID. This typically means government-issued photo identification, such as your state driver’s license or a passport. Other forms of ID may be accepted. When opening an account online, you may be asked for such details as your name, Social Security number, and birthdate, with an image of your ID needing to be uploaded on the spot or in the future. (Worth noting: You usually must be at least age 18 to open your own bank account.)

•   Contact information. This means your address, phone number, and email address will likely need to be provided.

•   An opening deposit. Some banks will allow you to open an account with no money at first (say, you might sign up to have your paychecks direct-deposited going forward) or others will require you to make a deposit of anywhere from $1, $25, $100, or more to start your bank account. If you are signing up for a premium checking account or high-yield account, there may be higher minimums involved.

Now that you know what’s needed to open a bank account, don’t overlook this important point: Don’t whisk every last cent out of your old account into the new account, though you may be tempted to do so to feel as if you are making progress. You may have pending transactions and autopays coming up that will take time to sort out.

Recommended: Interest APY Calculator

Step 3: Make a List of Automatic Payments and Direct Deposits

Here’s a closer look at those pending money movements. If you’re like most of us, you rely on autopay to simplify your banking; the pros of automatic payments are hard to ignore. This means that each month your various bills and subscriptions are seamlessly deducted from your primary account on their due date.

To avoid falling behind on bills or accidentally getting your streaming service suspended, you need to turn off or redirect every automatic payment that currently comes out of the account you wish to close. As you plan to make the switch, here are items you should keep track of:

•   Automatic payments: Take a careful look at which payments are made automatically from your bank account, such as mortgage, utilities, student loans, and more.

•   Recurring payments: Consider what subscription payments you have automatically coming out of your checking account, such as yoga studio memberships or streaming services

•   Recurring outgoing transfers: Look for payments that move to external accounts, such as funds being funneled into a retirement account or a health savings account.

•   Automatic deposits: This might include the direct deposit of paychecks, alimony, Social Security benefits, a tax refund, and other sources of income (such as payouts via P2P transfers, such as PayPal or Venmo for a side hustle).

Take a look at your monthly account statement and make a list of every automatic deduction. Also scan for those irregular automatic deductions (perhaps a quarterly insurance premium payment?). Once you’ve made your list, log in to each of your service provider accounts and change your payment information.

Step 4: Transfer Funds and Update Automatic Payments

You may have already made an opening deposit to your new account, but if not, now it’s time to transfer some funds from your old one to the new one.

It’s often possible to do this online; check with both banks involved to find the best way to transfer the funds. (Keep in mind, you’ll need to leave a bit of cash in your soon-to-be former account, to cover any pending transactions and miscellaneous charges or fees.)

You’ll also want to update any automatic payments you typically receive. This can involve contacting your job’s HR team about changing your direct deposit details or contacting Social Security about how to redirect your benefits.

Recommended: 7 Tips for Managing Your Money Better

Step 5: Monitor Pending Transactions

After you’ve canceled or rerouted all the automatic payments that deduct from the account you want to close, you will need to wait for any pending transactions to clear. These pending transactions are usually for bills or subscriptions that have one remaining payment left before the company can change your payment information. Or it could require an extra pay cycle for your salary to go into your account by direct deposit.

Waiting for all pending transactions to clear ensures that your bills will be paid and your subscriptions will continue without facing any overdraft fees. Make sure there is enough money in the account you wish to close to cover any pending payments. Wait two weeks to one month for any automatic payments to be deducted. Otherwise, you risk incurring fees for overdrafting.

Step 6: Close Your Old Bank Account

Once you have transferred all automatic payments and possible deposits and waited a cycle for those to update, you’re done. It’s time to close your old account.

•   Depending on where it’s held, you may be able to finalize this online or by phone. In other cases (usually at smaller local banks or credit unions), you may have to send a written request or turn up in person.

•   Be sure to transfer out any remaining funds or get a check for the amount left in the account.

•   Whether you close your account online or in person, make sure to request written confirmation that the account has been closed, says the Consumer Financial Protection Bureau. This is a safety-net move to protect you if some issue were to arise. When you receive the letter confirming your bank account is closed, make sure to save it somewhere safe for future reference.

You’re done! You’ve completed the process and switched banks.

Challenges and Considerations When Switching Banks

There are many good reasons to switch banks, but there are times when changing banks may not be worthwhile. So before diving in, think about the following:

•   If you are switching banks to get a sign-up bonus or short-lived perk, is it worth the trouble? Make sure that the amount of money you will gain is worth the effort, and that you won’t be hit with fees that negate the extra money you bring in. (You might look at what online banks offer; they often have lower or no fees.)

•   Check if the new account will require a hard credit inquiry to gain approval. Typically, financial institutions only do a soft pull, but if you are focused on maintaining or building your credit score, you should make sure.

•   Take extra care in tracking your automatic payments and deposits. It’s not uncommon to have more of these electronic financial transactions than you expect, and some can be infrequent or irregular, such as annual payment of a subscription or insurance premium. Forgetting to redirect payments or direct deposits can create a hassle down the road.

The Takeaway

As the personal banking market becomes ever more competitive, you may find yourself thinking about changing banks for the sake of better services, greater convenience, lower fees, higher interest rates, or other features. If you do find a new home for your money, it takes just six steps to make the switch. Yes, it’s a bit of effort, but the payoff can be well worth it.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Are there downsides to switching banks?

If you’re wondering about cons or how hard it is to switch banks, know that changing banks requires just a bit of effort and patience. You will need to complete some forms and move any automatic payments or deposits to your new account, as well as wait a cycle while these update. But changing financial institutions should not involve a charge or impact your credit score.

Is it difficult to switch banks?

To switch banks, you’ll need to identify a new financial institution and fund your new account. Then, you will need to transfer automatic payments, deposits (say, via direct deposit or PayPal), and wait for them to update. Once that happens, you are ready to transfer any remaining funds and officially close your old account.

What is the easiest way to switch banks?

The easiest way to switch banks can be to identify a new financial institution, complete your application, monitor and redirect automatic deposits and payments, wait a billing cycle, and then transfer any remaining funds and close your old account.

How long does it take to switch banks?

While it can take just a few minutes to open a new bank account, it usually is wise to wait a full billing cycle or two so that automatic payments and deposits can be transferred to your new account. Once that happens, you can feel confident in closing your old account.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOBNK-Q424-102