How to handle your banking when relocating to a new state, including when to switch banks and when to keep what you have.
- Moving to a new state raises a practical banking question: should you keep your current bank, switch to a local institution in your new location, or use the move as an opportunity to optimize your banking setup entirely?
- If You Bank With a Regional or Local Bank A regional bank that only operates in your previous state will not have branches in your new location.
- You can often keep the accounts open and manage them online, but you lose branch access for deposits, notary services, and in-person support.
Moving to a new state raises a practical banking question: should you keep your current bank, switch to a local institution in your new location, or use the move as an opportunity to optimize your banking setup entirely? The answer depends on what type of bank you currently use and what you need from your banking relationship.
If You Bank With a National Bank
If your current bank has branches in your new state, you may not need to change anything. Your accounts, debit cards, and direct deposits continue working seamlessly. Update your address with the bank and confirm that any state-specific features, like in-branch notary services, are available at your new local branch. This is the simplest scenario.
If your national bank does not have branches in your new state, you face the same decision as someone banking with a regional or local bank: adapt to branchless banking or switch institutions.
If You Bank With a Regional or Local Bank
A regional bank that only operates in your previous state will not have branches in your new location. You can often keep the accounts open and manage them online, but you lose branch access for deposits, notary services, and in-person support. If you rarely used branches before the move, this may be perfectly fine. If branch access matters to you, it is time to switch.
The Online Banking Option
A move is an excellent time to switch to an online bank if you have not already. Online banks work identically regardless of which state you live in. There are no branch networks to worry about, rates are typically higher, and the transition eliminates future moving-related banking disruptions entirely. If you move again, your banking stays exactly the same.
The combination of an online high-yield savings account for your reserves and either an online checking account or a local bank checking account for cash deposits gives you the best of both worlds.
The Switching Process
If you decide to switch, start the process before you move if possible. Open the new account, redirect your direct deposit, and begin shifting automatic payments over a period of two to four weeks. Keep the old account open with a small balance until you are confident everything has transitioned. Stragglers, payments or deposits that still reference the old account, can take a month or two to fully clear.
Update your address with all financial institutions, even ones you are closing accounts with, so that tax documents and final statements reach you. Banks send 1099-INT forms for interest earned, and these need to arrive at your current address for tax filing.
State Tax Considerations
Moving between states can affect the taxes you pay on savings interest. Some states have no income tax, meaning your savings interest is only taxed at the federal level. Others tax interest at significant rates. This does not affect which bank to use but is worth knowing as you plan your finances in your new state.
If you are moving from a no-income-tax state to one with state income tax, you may want to consider Treasury bills for some of your cash savings, since T-bill interest is exempt from state tax. If you are moving to a no-tax state, this consideration disappears.
Credit Unions After a Move
If you are a credit union member, check whether your membership continues after the move. Many credit unions allow existing members to retain membership regardless of location. You may lose convenient branch access, but shared branching networks provide basic services at other credit unions nationwide. If your new area has a credit union with better rates or services, joining the local one while keeping your existing membership gives you the most options.
Banking decisions when moving should account for your specific financial needs and the institutions available in your new area. See our financial disclaimer for important disclosures.
A worked example
A $10,000 emergency fund in a 0.4% national-average savings account earns $40/year. The same $10,000 in a 4.5% high-yield savings account earns $450/year. Over 10 years (assuming rates stay similar), that's a difference of $4,100. Same FDIC coverage. Same liquidity. The only thing the high-yield account lacks is a branch network you don't need anyway.
Common mistakes to avoid
- Keeping emergency funds in checking. A high-yield savings account is just as liquid and earns 10-50× more interest.
- Saving in a brokerage account before maxing tax-advantaged retirement accounts. You're paying taxes on growth that you wouldn't owe in an IRA or 401(k).
- Not having any emergency fund at all and relying on credit cards. When the emergency hits and the card is maxed, you have a much bigger problem than the original event.
Frequently asked questions
How much should I have in emergency savings?
Three to six months of essential expenses is the conventional answer. The exact number depends on your situation: single-income household with kids = 6+ months. Dual-income with stable jobs = 3 months may be enough. Self-employed or commission-based = 6-12 months. Keep it in a high-yield savings account, not in stocks.
Is a high-yield savings account safe?
Yes, as long as it's at an FDIC-insured bank (or NCUA-insured credit union). Coverage is $250,000 per depositor per insured bank per ownership category. Online banks routinely offer 4-5% APY because they have no branches to operate - the FDIC coverage is identical to any traditional bank.
Should I use a savings account or a money market account?
For most people, a high-yield savings account is simpler and the APY is competitive. Money market accounts sometimes offer slightly higher rates and check-writing privileges, but they often have higher minimum balances. The difference is small - pick the one with the better APY at the time you open the account.
What's the difference between APR and APY?
APR is the simple annual rate. APY is the rate after compounding. A 5% APR compounded monthly is actually 5.12% APY because each month's interest earns interest the following month. When comparing savings accounts, always look at APY - that's what you'll actually earn.
Are CDs worth it?
When CD rates are above high-yield savings rates AND you don't need the money for the CD term, yes. A 12-month CD at 5% locks in that rate even if the Fed cuts rates next month. Building a 'CD ladder' (multiple CDs maturing at different times) gives you ongoing access to maturing principal while keeping most of it locked in.
Where this guide fits in
This article is part of the Chase The Dollar editorial library of practical money guides. We update guides as rules and rates change. If you spot a mistake or want us to cover a topic, the contact form is the fastest way to reach us.