How to Switch from a Traditional Bank to a Neobank in 5 Easy Steps

Switching from a traditional bank to a neobank can feel like a big move, but it doesn’t have to be complicated. With their low fees, innovative features, and user-friendly apps, neobanks are becoming the go-to choice for millions of people. If you’re ready to make the switch, this step-by-step guide will walk you through the process of how to switch to a digital bank smoothly and securely.

Why Switch to a Neobank?

Before diving into the steps, let’s quickly recap why neobanks are worth considering:

• Lower Fees: No monthly maintenance fees or hidden charges.
• Better Technology: Intuitive apps with features like budgeting tools and real-time notifications.
• Higher Interest Rates: Many neobanks offer competitive APYs on savings accounts.
• Global Accessibility: Multi-currency accounts and fee-free international transactions.

Step 1: Research and Choose the Right Neobank

Not all neobanks are created equal. Start by researching the best neobanks in 2025 to find one that suits your needs. Consider the following factors:

• Fees: Look for no or low fees for transactions, ATM withdrawals, and account maintenance.
• Features: Identify the features you need, such as budgeting tools, savings options, or international transactions.
• Security: Ensure the neobank uses advanced security measures like encryption and biometric login.
• Regulatory Compliance: Choose a neobank that is licensed and regulated in your country.

For a detailed comparison of neobanks, check out NerdWallet’s step-by-step guides.

Step 2: Open Your Neobank Account

Once you’ve chosen a neobank, the next step is to open an account. Here’s how:

1. Download the App: Most neobanks operate exclusively through mobile apps, so download the app from the App Store or Google Play.
2. Sign Up: Follow the prompts to create an account. You’ll typically need to provide:
   • Your full name and contact information.
   • A government-issued ID (e.g., passport or driver’s license).
   • Proof of address (e.g., a utility bill or bank statement).
3. Verify Your Identity: Neobanks use secure methods like photo verification or video calls to confirm your identity.
4. Set Up Your Account: Choose the type of account you want (e.g., checking, savings, or both) and customize your settings.

Step 3: Move Your Money

Now that your neobank account is set up, it’s time to move money to a fintech bank. Here’s how to do it:

1. Link Your Traditional Bank Account: Use your neobank’s app to link your existing bank account. This usually involves providing your account number and routing number.
2. Transfer Funds: Initiate a transfer from your traditional bank to your neobank. Most neobanks allow you to transfer money instantly or within a few business days.
3. Set Up Direct Deposits: If you receive regular payments (e.g., salary or benefits), update your direct deposit information with your neobank account details.

Pro Tip: Keep some funds in your traditional bank account during the transition period to cover any pending bills or unexpected expenses.

Step 4: Update Your Automatic Payments and Subscriptions

One of the most important steps in how to switch to a digital bank is updating your automatic payments and subscriptions. Here’s how:

1. Make a List: Write down all your automatic payments, such as:
   • Utility bills (electricity, water, internet).
   • Subscription services (Netflix, Spotify, gym memberships).
   • Loan repayments (mortgage, car loan, student loans).
2. Update Payment Information: Log in to each service and update your payment details with your new neobank account information.
3. Confirm Changes: Double-check that the updates have been processed successfully.

Step 5: Close Your Traditional Bank Account (Optional)

If you’re fully satisfied with your neobank and no longer need your traditional bank account, you can close it. Here’s how:

1. Ensure All Transactions Are Complete: Make sure all checks have cleared and all automatic payments have been switched to your neobank.
2. Withdraw Remaining Funds: Transfer any remaining balance to your neobank account.
3. Contact Your Bank: Call or visit your traditional bank to request account closure. Some banks may require a written request.
4. Get Confirmation: Ask for written confirmation that your account has been closed.

Note: Some people prefer to keep their traditional bank account open with a small balance as a backup.

Tips for a Smooth Switch to digital bank

• Start Small: Test your neobank with a small amount of money before fully committing.
• Monitor Your Accounts: Keep an eye on both your traditional and neobank accounts during the transition.
• Stay Secure: Use strong passwords and enable two-factor authentication for added security. For more tips, check out TechCrunch’s digital banking trends.

The Future of Digital Banking

Switching to a neobank is more than just a change of accounts—it’s a step into the future of banking. With their innovative features and customer-centric approach, neobanks are setting new standards for financial services.

As you settle into your new neobank, you’ll likely discover even more ways to simplify and enhance your financial life.

Conclusion

Switching from a traditional bank to a neobank is easier than ever, thanks to user-friendly apps and seamless processes. By following this step-by-step guide, you can make the digital banking transition smoothly and confidently.

For more tips and insights, visit NerdWallet and TechCrunch.

For more tips and insights on managing your finances with a neobank, check out our post on Why Everyone is Switching to Neobanks: What You’re Missing Out On.

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