How to Transfer Recurring Payments When Switching Banks: Step-by-Step Guide

Switching banks can be a smart move for your business, offering better features, lower fees, and improved financial tools. However, transferring recurring payments is often the most time-consuming part of the process. To ensure a smooth transition, this guide will walk you through how to transfer automatic payments and deposits efficiently while avoiding disruptions to your operations.

Why Transferring Recurring Payments Matters

Recurring payments are the backbone of many businesses’ financial operations. These include:

• Incoming Deposits: Payroll, customer payments, government benefits.

• Outgoing Payments: Utility bills, subscription services, vendor invoices, loan payments.

Failing to update these payments can lead to missed bills, service interruptions, or delayed deposits. A systematic approach ensures your business runs smoothly during the transition.

Step-by-Step Guide to Transferring Recurring Payments

1. Create an Inventory of Recurring Transactions

Start by listing all automatic payments and deposits linked to your old account. Review 3–6 months of bank statements to identify:

• Incoming Deposits: Payroll direct deposits, customer ACH payments, payment processor deposits (e.g., Stripe, PayPal).

• Outgoing Payments: Utilities (electricity, internet), subscription services (software tools), vendor invoices, loan repayments.

Pro Tip: Include quarterly or annual transactions that may not appear in monthly statements.

2. Open Your New Bank Account

Before transferring payments, ensure your new account is ready:

• Provide required documentation (e.g., EIN, business registration forms).

• Verify account details like routing and account numbers.

• Set up online banking and security features for easy management.

3. Notify Vendors and Service Providers

Contact each vendor or service provider individually to update payment details:

• Log into their online portals and update your bank account information.

• For vendors without online systems, provide updated banking details via email or phone.

• Confirm the changes with each provider and ask for a confirmation email or receipt.

4. Update Direct Deposits

Redirect incoming deposits such as payroll and government benefits:

• Payroll: Submit a new direct deposit form with your employer or payroll processor using your new bank’s routing and account numbers.

• Government Benefits: Update deposit information through the relevant agency’s website or by contacting them directly.

Allow 1–2 pay periods for these changes to take effect before closing your old account.

5. Set Up New Bill Pay Systems

If you used bill pay at your old bank for outgoing payments:

• Cancel existing bill pay arrangements with your old bank.

• Recreate these payments in your new bank’s bill pay system.

For Holdings users, integrated invoicing and bill pay tools simplify this process by consolidating payment management into one platform.

6. Transfer Funds Gradually

Keep both accounts active during the transition period:

• Transfer a small amount initially to test transactions from the new account.

• Leave sufficient funds in the old account to cover any pending automatic payments or checks that haven’t cleared yet.

Monitor both accounts closely to ensure no payments are missed.

7. Test Payments Before Closing Your Old Account

Run small test transactions from your new account for key recurring payments:

• Ensure vendors receive payments on time from the new account.

• Verify incoming deposits are successfully routed to the new account.

Once all transactions are confirmed, you can proceed with closing your old account.

Common Challenges When Transferring Recurring Payments

Challenge: Missed Payments During Transition
Solution: Keep funds in your old account for 30–60 days to cover any overlooked transactions while monitoring activity weekly.

Challenge: Delayed Direct Deposits
Solution: Allow enough time (1–2 pay cycles) for deposit changes to take effect before closing your old account.

Challenge: Vendor Confusion Over Payment Updates
Solution: Notify vendors early and follow up with reminders until confirmations are received.

Challenge: Integration Issues with Accounting Software
Solution: Use Holdings’ integrated accounting tools to streamline payment updates directly from your banking activity.

How Holdings Simplifies Transferring Recurring Payments

Holdings offers advanced tools designed specifically for businesses switching banks:

Key Features That Streamline Payment Transfers:

1. Digital Account Opening: Open accounts online in minutes without paperwork delays.

2. Integrated Bill Pay Tools: Manage outgoing payments directly within Holdings’ platform—no need for third-party systems.

3. Multi-Account Management: Easily track transactions across accounts during the transition period.

4. Automated Accounting Integration: Reduce manual work by syncing payment updates directly into bookkeeping software.

With Holdings’ seamless onboarding process and modern financial tools, transferring recurring payments becomes faster and easier than ever.

Final Tips for a Smooth Transition

1. Start Early: Begin updating payment information as soon as your new account is active to avoid disruptions.

2. Stay Organized: Use a spreadsheet or checklist to track updates for each vendor and customer.

3. Monitor Activity: Regularly check both accounts during the transition period to catch any missed transactions.

4. Communicate Clearly: Notify vendors, customers, and employees about the change well in advance.

Switching banks doesn’t have to be stressful—especially when you have a clear plan in place and a banking partner like Holdings that simplifies every step of the process.

Ready to switch? Open a Holdings account today and experience hassle-free banking tailored for businesses like yours!