How to Close a Bank Account

Open a new account, move money and bills, and close the account by contacting your old bank.

Spencer TierneyDec 9, 2020
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Saying goodbye to a bank account isn’t as easy as unsubscribing from email newsletters, but with the right planning, you can make sure that account doesn’t linger as an unwelcome guest for months on end.

To close a bank account, call your bank, visit a branch, or do it online, depending on your preferences and what the bank allows. But there are other steps to take first. Here’s a guide for how to close checking and savings accounts.

1. Choose a new bank account

Have a new account lined up to handle your everyday finances. There’s no one-size-fits-all checking or savings account, so look for accounts with services and features you would like to use, which might include:

  • No monthly fees. Look for a free account or one that has an easy way to waive fees such as satisfying a low minimum balance or account activity requirement.

  • Easy access to funds. You might want an extensive ATM or branch network, the ability to transfer money online fast, or both.

  • Perks. This could mean a competitive interest rate, a sign-up bonus, ATM fee reimbursements, or other benefits.

  • Better customer service than your previous bank. This tends to be subjective, so consider contacting a prospective bank’s support team to see how helpful it is.

» Want to check rates? See the best high-yield savings accounts

In addition to account features, you’re also choosing from a few different types of financial institutions: banks, credit unions, and nonbanks. Credit unions are the not-for-profit equivalent to banks, and nonbanks are companies that partner with banks to offer typically federally insured online checking or savings accounts.

Frequently asked questions

Typically no. The three major credit reporting agencies, Experian, Equifax and TransUnion, don’t usually collect information about checking or savings accounts.

However, if your account had unpaid fees or an overdrawn balance when it was closed, you’ll likely get a negative record on file with the consumer reporting agency ChexSystems. A ChexSystems report doesn’t affect your credit, but having unpaid debts can, especially if that debt gets passed on to a debt collector.

That might mean one of two things: The bank wasn’t able to identify you properly or you might be blacklisted from getting a new bank account.

If it’s the first, contact the bank to see what personal details couldn’t be verified and try again.

If it’s the second, you might need to pay overdue debts with a bank or otherwise clear your ChexSystems record. Over 80% of banks and credit unions use ChexSystems or a similar agency to screen prospective customers, according to the National Consumer Law Center. See five steps to clear your ChexSystems record.

Generally, no. The main exception is if you close an account shortly after opening it. Some banks and credit unions charge what’s called an early account closure fee that kicks in if you close an account within a time frame such as 90 or 180 days.

2. Open it

Gather your ID and other personal details and apply at the new banking institution’s website or branch. You’ll generally fund the new account either by linking up an existing account to transfer money or by check or cash at a bank branch, if applicable. See more about how to open a bank account.

Remember you can have more than one checking or savings account; in fact, having multiple savings accounts can be a strategy to save money.

3. List recurring deposits and withdrawals on your old account

Go through recent bank statements or your transaction history to make a list of any direct deposits, bill payments, subscriptions, automatic transfers, and other regularly scheduled deposits or withdrawals. If you have any annual subscriptions, go through the last 12 months of transactions.

4. Move your money and automatic transactions to your new account

Update your bank account information across any services you pay for, which can range from your utility company to Netflix. If you receive direct deposits, work with your employer to use your new checking account (for more details, see our guide to setting up direct deposits). The process for migrating payments, transfers, and deposits to the new account can take weeks or months, so pace yourself.

5. Close your old account and double-check it’s closed

As noted above, contact your bank through the method that works for you and the bank: Call, visit a branch, or use an online method such as live chat or messaging. You might need to fill out a form as well. When you talk to someone, you might feel pressure to stay because the bank doesn’t want to lose customers. To avoid getting cold feet, consider writing down what you’ll say ahead of time.

Once an account is closed, get confirmation in writing and check what your bank’s policy is for reopening accounts. If you forgot to cancel an automatic bill payment, for example, a bank may reopen the account even if that results in a negative balance and overdraft fees. Keep an eye out for any communication from that bank about unexpected activity.

More things to know about closing a bank account

Can you close a bank account online?

It depends. Banking institutions have different policies, so check with yours. Some let you send a message or chat with customer service online, while others require you to call to close an account.

Can a bank close your account without your permission?

Yes, but this only tends to happen if your account had an unpaid negative balance from overdrafts or you’re suspected of fraud. If that sounds like what happened to you, learn more about ChexSystems, the consumer reporting agency that collects information on misused checking and savings accounts.

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