October 29th, 2009
How to Close a Bank Account
Are you unhappy with your current bank? Or maybe your bank is starting to charge you extra fees, your APY dropped, the bank closed your account, or you just want to switch banks or put your money elsewhere (say, in a CD or in the stock market). Whatever the reason, don’t be intimidated to close your bank account. First of all, closing your bank account will not affect your credit score; neither will opening a new bank account. Second of all, I’ve lined up the following pointers just for you to make sure you close your current account and moving on to a fresh start as painlessly and easily as possible:
- A very important step to do before closing your account: make sure all checks being withdrawn and deposited have cleared before attempting to close the account. Stop using your account and clear all debit transactions and any other outstanding transactions completely.
- Another important tip: choose your new bank and open your account before you close your old account so you can transfer your automatic transactions and current balance to it immediately.
- Once your new account is open but before you close your old account, list all your automatic transactions and make sure they are re-linked to your new bank account. Give your employer your new banking information to do automatic paycheck deposits to the correct account. If you have automatic bill pay set up with your current account, also make sure you relink to your new account so your bills are still paid and on-time. Just be sure you stop and redirect all direct deposits, automatic transfers, and automatic withdrawals you have tied to your old account—you don’t want to miss anything crucial that will affect your credit like your car payment.
- If your bank has a physical location, go in person to talk to a teller or customer service about closing your account so you can ask any questions and verify any information as needed. If not, send a formal letter requesting to close your account. Also, before you go in to your bank, prepare yourself: call ahead (and you should also do this if you have an online bank without a physical branch) and ask if there are any fees or charges for closing your account. If you are visiting your bank’s branch, bring with you two forms of identification and photo ID, just in case they should ask.
- Before closing your account, request a print-out of your current balance. Whether you request to transfer the funds into your new account or you request your balance in cash or cashier’s check, make sure you or your new account has the correct amount of funds in it.
- If you have checks or a debit card attached to your account, make sure you stop using both and cut or shred them before recycling. Also, keep an eye on your credit report and any bank statements you might still receive to make sure no other activity occurs thereafter on your account; if so, you might be a victim of identity fraud or someone else opened and is using your account—contact the bank immediately.
Other tips
- If you have a joint bank account with another person, some banks require both individuals to be present when closing it, or if you are sending your request via letter, both of your signatures.
- When visiting a physical branch, call ahead for the bank’s open hours because sometimes banks have a specific employee and time window for handling bank closures.
- Depending where you are transferring the funds too or how large your balance is, keep in mind it may take several days to process your closing request.
- It’s a good idea to keep your old account open for a month or so after opening your new account, and leave a little cushion money in there. This way, you could monitor your account and see if any automatic transactions occur that you forget to transfer to your new bank.
At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!
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