How To Close A Bank Account

When you open a new bank, you may find yourself needing to move an existing savings or checking into another one. Regardless of why you want to move accounts, you’ll probably want to transfer funds from your old bank to your new one.

When closing a banking account, there are some things you need to be aware of so you don’t lose any money. Here are some tips to help you close an account properly.

Reasons for Closing a Bank Account

There are several reasons why you may want to close an existing bank or credit card. Here are some of them:

You’re going to move to a new city or town.
You can get lower mortgage payments
You’re switching from using paper checks to electronic banking
You qualify for an offer from a bank
You want to avoid bad customer service.
Your credit card company is charging you high fees for using their
You can always find better features and services elsewhere.
You’re opening an account for both of us.
You’re consolidating all your bank account balances into one single
You’re switching from one type of account to another.

Whatever the reason, think about whether you’re doing the right things for your finances.

Closing a bank account

Closing a business loan requires more than just calling your lender. You should prepare yourself ahead of time so you can make the best possible case. Here are some things you might consider doing before you call them.

1. Create a new account.

First, you must create a new bank account. A bank account allows you to receive direct deposits and pay bills online.

There are many factors when choosing a new banking institution, but one of the most important ones is whether you’re comfortable with the service provider. If you’re not sure where to start, consider starting with a traditional brick-and mortar banking institution first.

You need to switch your existing scheduled payments and deposits from one bank account to another.

If you have any automatic paychecks or direct deposit set up, move them from the old account to the new one. Ask your boss if there are any paperwork you need to complete for direct deposit.

Make sure you know exactly what you’re paying for each month, including any fees or charges.

Car payments
Mortgage payments
Insurance payments
Student or personal loans
Credit card payments
Gym memberships
Streaming services
Utility bills and other household bills

A good way to keep track of which cards you’ve paid off and which ones you haven’t is to create a spreadsheet listing each card by name.

3. Transfer Your Money

Before you move any funds from your current bank account, wait until all outstanding payments (including checks) have cleared before doing anything else. Otherwise, you may be charged an overdrawn fee. If there is still some cash left in the account when you’re done, take it out or transfer it into your new account.

You shouldn’t be transferring money from your savings or checking accounts into an investment fund if you don’t plan to use them for at least six months.

4. Contact Your Bank

Cancel your banking account. Many financial institutions let you do this online, but they might ask you to make a phone call to their help desk or send them a letter. You can also close your account yourself via the internet or mail. Your institution should tell you how to go about doing so.

Once the bank has verified that the accounts are in good standing and that there aren’t any outstanding fees or charges, it will mark the accounts as closed. You may then request a transfer to another checking or savings accounts or receive a paper statement by snail-post if you wish.

5. If Required, Send a Letter to Close Your Bank Account

If you want to close your checking or savings accounts, you can use the following templates.

Date

Dear Sir/Madam,

Please close these accounts:

List the account name and account number associated with each transaction.

If there are any funds left in those bank account(s), please send them to the following address. Please confirm by writing back to us with a letter confirming the previous transfer.

If you need help with anything, please let me know.

Thank you,

Signature

Full name (Printed)

Mailing address

Phone number

6. Get Written Confirmation

Don’t assume that an online banking service has shut down your accounts. Get written confirmation from them before closing any accounts. If they don’t provide this, contact the CFPB at 1‑855‑441‑8283.

Closing certain types of bank accounts

Some situations may arise where an additional step needs to be taken to properly handle a bank closure request. Here are some examples of these types of situations.

Joint Account

If you want to close a joint account online, you might need to get both account owners’ consent. Some financial institutions allow you to cancel a joint account online without requiring both account owners’ approval.

Child’s Account

You may be able to convert an existing custodial bank savings or checking deposit into a regular bank savings or checking deposit by closing the custodial bank savings or checking deposit.

Inactive Account

If your bank has marked your bank accounts inactive, contact them to reactivate them. You may also be able to do this through your internet or mobile banking.

Overdrawn Account

If your checking or savings accounts are overdrawn, they may be preventing you from closing them. To close these accounts, you’ll first need to bring them back into positive balance.

Deceased Person’s Account

Closing an account after someone passes away can be much easier than closing another type of account. State laws vary regarding what needs to be done to close an account after death. You should consult your lawyer about any specific requirements.

Can You Close a Bank Account Online?

Many banking institutions allow customers to cancel accounts online. It’s often done through online messaging or electronic mail. Some provide chat services that make it easy to cancel an account through live help. Other sites give customers the option to log into their account and click “cancel my account”.

Contact your bank to see if there are any options for closing your credit card accounts. Make sure your accounts are in good shape before trying to close them.

What’s the cost of closing an account?

You don’t usually need to pay any fees when closing a bank or credit union time-deposit or certificate of deposit (CD)

Closing a bank account takes time.

Closing an old bank or credit card accounts can be a quick and easy procedure, especially if you’ve previously moved your money out of the old bank or credit card and into a new one. However, if you haven’t yet moved your money out of your old bank or credit card, then the closing procedure could take longer than expected.

If you want to close a bank account, here are some tips for doing

If you plan on closing a bank acount soon, here are some extra things you can do to benefit yourself in the future:

First open a new account. Doing so allows you to move any money from your old account into your new one before starting to use it. It also lets you start making transactions when you switch accounts.
Keep track of every interaction with the bank. When closing an account, follow up with the bank. And if there was any confusion during the closure, document it.
Delete the contents of your old bank accounts. If they’re not already gone, destroy any checkbooks or debit card linked to your old account.

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Bottom Line

To close an old bank account, follow these simple instructions. Make sure to keep track of all transactions and correspondence from your bank so that you can be sure to get everything done correctly.

Frequently Asked Questions (FAQs)

Closing a banking account doesn’t affect your credit score.

Your credit reports don’t include your checking or savings accounts. Closing an old checking or savings accounts won’t impact your credit scores or histories. Although banks may inform ChexSystems when they close your accounts, closing them won’t impact your Chex System reports.

How do you get cash out of an ATM when the ATM has been shut down?

If you close an old checking or savings (or any) banking accounts, you’ll still be able to access them if they haven’t been closed yet. You may not be able to use them anymore though. If your local branch has shut down, you can still go to another branch or log into their online services. If your local branch was sold off by the financial institution, you can still get in touch with the Federal Deposit Insurance Corporation to ask about your balance.

A bank may close your checking/saving/or credit card accounts without notice if they think there�

Your account may be shut down due to inactivation or low activity. You don’t need to know why your account was shut down. Consult your banking institution’s terms and conditions for details regarding closing accounts.

Is there any way to reopen an unopened bank acoount?

Depending on your bank’s policy, you may be able to reopen an old bank account if you contact them directly. Otherwise, you can just start a new one.

Will I be able to close my current bank account and reopen a new account at the same bank?

Yes, most financial institutions let you close an existing account and then reopen a new one. However, the closing procedure for the original account is exactly the same, although they may be more willing to accept your request if you’re opening a new account.

Can my bank account go into negative balance for so long before it gets closed?

Typically, when a person has an overdraft, their banking institution will keep the overdraft active until the balance reaches zero or higher. Their banking institution might close the overdraft and report them to a debt collection agency, which could negatively impact their chance of getting approved for a new checking or savings deposit.

When do they keep records of old accounts for?

You must be able to prove that you had an account with a bank before January 1, 2009.

What if my bank accounts are closed?

If an employer deposits cash into your bank accounts, they are automatically deposited back into their own accounts. However, if this happens, contact the employer immediately with alternative address info so they can transfer the money to a new address. You can avoid this problem by changing your direct depositing info with your employer.