Kevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Kevin Payne Banking WriterKevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Written By Kevin Payne Banking WriterKevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Kevin Payne Banking WriterKevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications l.
Banking WriterManaging Editor, Global Data and Automation for Forbes Advisor. Mitch has more than a decade of experience as personal finance editor, writer and content strategist. Before joining Forbes Advisor, Mitch worked for several sites, including Bankrate, I.
Managing Editor, Global Data and Automation for Forbes Advisor. Mitch has more than a decade of experience as personal finance editor, writer and content strategist. Before joining Forbes Advisor, Mitch worked for several sites, including Bankrate, I.
Managing Editor, Global Data and Automation for Forbes Advisor. Mitch has more than a decade of experience as personal finance editor, writer and content strategist. Before joining Forbes Advisor, Mitch worked for several sites, including Bankrate, I.
Managing Editor, Global Data and Automation for Forbes Advisor. Mitch has more than a decade of experience as personal finance editor, writer and content strategist. Before joining Forbes Advisor, Mitch worked for several sites, including Bankrate, I.
Updated: Jun 2, 2022, 4:33pm
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As your banking needs change, you may find yourself in a situation where you need to close a bank account. It could be that you’re moving and need to find a new bank or want to switch banks to take advantage of better interest rates. Whatever the reason, you’ll likely want to close your old bank account.
Closing a bank account isn’t complicated, but there are actions you can take to ensure the account is closed correctly—and all of your money accounted for. Follow these steps when closing a bank account.
You don’t need a reason to close a bank account. However, there are numerous reasons you might want to. Here are some of the more common reasons to move on from your current account:
Whatever the reason, consider the decision carefully to ensure you’re making the right moves for your financial situation.
Closing a bank account involves more than contacting your bank. You’ll want to do some advance work to ensure a successful transition. The specifics for closing an account vary by bank and credit union. Be sure to check your banking institution for special requirements. Generally, follow the steps below.
The first thing you need to do is open a new bank account. Having an account in place ensures you have a place to transfer direct deposits and payments or debits.
Many factors go into choosing a new bank, including savings rates, fees and account offerings. Whether you decide on a traditional brick-and-mortar bank or an online bank, ensure you’ve established your new account before moving forward.
If you have any direct deposits or automatic payments set up, move them to the new account. Check with your employer regarding any forms you need to fill out for direct deposit so your paycheck can be rerouted to the new account.
Do yourself a favor and make a list of your monthly recurring payments. This could include:
Having a list helps ensure you’ve canceled all of the payments attached to your old account, but you’ll also be prepared when you need to set them up for your new bank account.
Before you move money out of your account, let outstanding transactions clear. Failure to do so could result in having to pay overdraft fees. If you still have money in the account after everything clears, withdraw the money or transfer it to your new account.
If your bank account has a minimum balance requirement, only transfer money out of the account when you’re ready to close it so that you’re not charged a monthly maintenance fee.
Cancel your bank account. Many financial institutions allow you to do this online, but it could require a phone call to customer service or a visit to a local bank branch. Some banks and credit unions may require you to fill out an account closure request form or submit a written request. Follow your bank’s guidance on the proper contact method to start the closure process.
The bank will check your account to ensure it’s in good standing and that you’ve resolved any outstanding issues before it marks the account as closed. If there are any remaining funds in the account, you should be able to request a transfer to your new account or receive a check by mail.
You can write a letter to your bank to close an account. To do so, you can use the template below or a similar format.
To whom it may concern,
Please close the following bank account(s):
Please send a check for any remaining funds in those accounts to the address below. Please follow up with written confirmation to verify the previously mentioned accounts have been closed.
Please contact me if you have any questions.
Full name (Printed)
Don’t assume that the account is closed. The Consumer Financial Protection Bureau recommends getting written confirmation when you close a bank account. This protects you if the bank doesn’t follow through or some issue arises.
Not all account closures are handled the same. Other scenarios may pop up that require extra steps to close a bank account. Here’s a look at a few examples that might require extra attention.
Your bank may require an account closure request with both account holders’ signatures if you’re closing a joint account. Many banks, however, only require one account holder’s authorization. Canceling a joint account online could require both parties to request an account closure.
Some bank accounts are automatically converted into regular accounts when a child turns 18. If you’re of your state’s legal age to take complete control of your custodial account, you can close the account the same as any other bank account.
If your account has been marked “Inactive,” you’ll need to reactivate it before it can be closed by the bank. Contact your bank’s customer service to reactivate your bank account. There might also be an option to do this through your online or mobile banking.
Having an overdrawn account could prevent you from closing an account. You’ll need to get your account to a zero balance or higher before the bank will process your closure request.
Closing the bank account of a loved one who has passed away can be more complicated than closing other accounts. How the account is handled depends mainly on how the deceased structured their finances, including whether they listed a beneficiary or had a will. Requirements and documentation may depend on state law. Your best bet is to seek legal counsel before proceeding.
Many banks allow you to close an account online. It’s especially common among online banks. Some enable you to close an account via online messaging or email. Others offer chat features that let you close an account through customer support.
Contact your bank to figure out options. Ensure your account is in good standing and has a zero balance before you try to close it.
Typically, it doesn’t cost anything to close a checking, savings or money market account. Time-deposit accounts, such as certificates of deposit (CDs), may issue a penalty. Most banks and credit unions charge an early withdrawal penalty if you close a CD account before its maturity date.
Closing a bank account can be a quick process, especially if you’ve already transferred funds from the account and accounted for any lingering transactions. If you’ve already withdrawn or transferred funds to another account, the closing process may only take a few minutes.
If you’re planning on closing a bank account soon, here are a few extra tips that will benefit you in the long run:
If you need to close a bank account for any reason, you can speed up the process by following the steps above. Keep records of all transactions and correspondence with your bank to ensure that your account has been closed properly.
Bank accounts are different from credit card accounts and aren’t part of your credit report. Closing a bank account doesn’t affect your credit score or history. Although financial institutions report account closures to ChexSystems, opting to close a bank account doesn’t impact your ChexSystems report.
If you close a bank account but still have funds in the account, you should receive a check from the bank for the remaining funds. If your local bank branch closes, you still have access to your account and funds at other bank branches or online. When a bank shuts down all of its operations, you can contact the FDIC directly to inquire about outstanding funds.
Your bank account could be closed by your bank for many reasons, including inactivity or low usage. Banks aren’t required to give notice when they close an account. Consult your bank’s deposit account agreement for guidelines on when an account might be closed.
You can reopen a closed bank account in some instances, depending on your bank’s policies. If allowed, typically, you can do this by making a request either in person, by phone or online. If not, you can simply open a new account.
Yes, banks allow you to close one account and open another one. The process to close the old account is the same, although you’ll find your bank much happier to keep your business.
Typically, banks will keep accounts with negative balances open until they are brought up to a zero balance or higher. Bank policy dictates how accounts are handled. Your bank may close your bank account and report you to a debit bureau like ChexSystems, which could hurt your chances of opening another bank account.
If an employer sends direct deposit funds to a closed bank account, they are returned to the original sender. If this happens, contact the sender immediately with alternative account information so they can send the funds to a new account. You can avoid this by updating your direct deposit information with your employer.
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By Rebecca Lake
By Kevin Payne
By Amanda Claypool
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Banking WriterKevin has been writing and creating personal finance and travel content for over six years. He is the founder of the award-winning blog, Family Money Adventure, and host of the Family Money Adventure Show podcast. He has been quoted by publications like Readers Digest and The Wall Street Journal. Kevin's work has been featured in Bankrate, Credible, CreditCards.com, Fox Money, LendingTree, MarketWatch, Newsweek, New York Post, Time, ValuePenguin and USA Today.
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