How to Close a Bank Account

Tired of your current bank? When you move or decide to change bank accounts, you’ll need to close your existing checking account. It’s a pretty simple process, but there are certain steps you should take to make sure your account is closed properly so you don’t get hit with any overdraft charges, fees, or other problems. Follow these steps to make sure you cover all the details and successfully close your checking account.

1. Open a New Account

Before you actually close your bank account, make sure you open a new account first. This way, you’ll have somewhere to transfer your payments and funds later on. If you’re unsure of which institution to bank with, I recommend checking out the best bank promotions we’ve found, here on BankDealGuy. You’ll find all the information about each bank like fees and the bonuses they’re having via our reviews. There are many options to choose from, so you don’t have to be stuck with an account you don’t like.

2. Verify No More Payments From The Account

Before you actually close your account for good, you need to tie up any loose ends. Stop using your checking account for payments, and allow all existing charges to clear completely before you close the account.

Also, take a look at all your automatic and recurring payments. This includes your music and television streaming services, your gym membership, loan payments and more. You should look at bank statements from the past year to get a look at your spending habits.

Begin cancelling your payments from your old account and set them up with your new account. Make sure you note when each next payment will be. This’ll prevent potentially paying twice for a service from each account. It’ll also ensure you don’t overdraft one account to make the payment.

3. Switch Your Direct Deposits

If you work, remember to head to your company’s payroll department to update your direct deposit settings to reflect the change in account. You’ll need to provide your new bank account’s routing and account numbers. This may take some time to take effect so be sure to monitor both accounts to make sure the changes go through correctly.

This also applies to any investment or brokerage accounts and any other sources of income you might have. You’ll have to change your account information in those accounts to make sure you receive your payouts.

4. Transfer Funds to Your New Account

Once you’ve updated your payments and deposits, you can transfer funds to your new account. Also check for any transfer limits. You may not be able to transfer your whole balance over all at once. In that case, you’ll have to transfer your balance over a bit at a time. Also, if your account has a minimum balance requirement, don’t forget to keep that amount in there as well.

Make sure you also leave enough money in the account to cover any remaining payments for your automatic payments you checked for above. You should also leave some extra money in there if any other unexpected payments come up. Otherwise, you could face overdraft fees.

5. Close the Account

Now you can close your account. Depending on how long it takes for payments to settle and migrate to the new account, this may take weeks or months to complete. It’s important to make sure all your automatic payments are taken care of at this point. If not, you may end up with a “zombie” account where a bank has to reopen your account to make a forgotten automatic payment.

There are a few ways you can close your account. You can head to the nearest branch to close it with a bank representative. This is the most straightforward, since you can ask any questions you may have.

If a physical branch isn’t near you or you don’t have time to visit one, you can also close your account online. Each bank’s exact processes will differ. Generally, you’ll need to contact customer service through your secure messaging system to request your account closure.

You may also need to write a letter requesting that the bank close your account. Important items to include are your name, address, and account number. You can also request to have a letter sent to you to confirm that your account has been closed. It’s highly recommended and can come in handy as proof of closure if your old bank resurrects your old account to make future payments at any time.

6. Close Any Related Accounts

When closing your checking account, make sure that any related accounts are closed. Many checking accounts offer savings accounts that you may have opened along with it.

You should ensure that you close any other accounts tied to your name, as it could potentially cause issues if your identity is stolen or someone tries to reopen the account in your name.

You can request that this is closed in the same letter you use to close your bank account.

7. The Final Touches

To avoid accidentally using the old checks or debit card or having someone use them fraudulently, shred any remaining checks and cut up your debit card. It’s essential that you do this and it could be an expensive mistake if you don’t.

Make sure you also keep your records on file, such as your conformation letter and your past bank statements. You’ll need them for your records and potentially for taxes purposes.

Keep an eye on your ChexSystems report, to make sure nothing else happens with the closed account or bank. If you do see any charges on that account or with your old bank, contact the bank immediately.

Author’s Verdict

Before you get started on closing your account, open your new account first. This way, you can continually access your money and make sure you have all your automatic payments sorted out before you close your account. In addition, make sure you’re opening an account with a bank that meets your needs. You may also be interested in banking with a credit union, if you have some near you.

Stop all direct deposits like your paycheck, automatic transfers to savings, and withdrawals from your account. Do this about a month before you close your account. These include things like gym membership fees, insurance payments, and other household bills.

When you look for a new bank account, consider the minimum balance requirements and fees that you may incur at your new bank. Also be sure you understand the withdrawal and transfer limits.