Is it safe to upgrade Bash via Homebrew?
Binaries in /{,usr/}{,s}bin/ should not usually be replaced with other files. Other programs expect them to be the versions that came with OS X, and they are replaced by OS upgrades.

After running brew install bash, you can change the default shell safely by:


Adding /usr/local/bin/bash to /etc/shells
Running chsh -s /usr/local/bin/bash.


Settings in Terminal or iTerm 2 don't normally have to be changed. Both of them default to opening new windows with a login shell of the default shell.

The default shell can also be changed from System Preferences or with dscl, but all three options just modify /var/db/dslocal/nodes/Default/users/$USER.plist.