How to Close A Bank Account: The Easy Steps You Can Take

By Todd Kunsman

Money Basics

Published on

Updated on

During your lifetime, you may want to close a bank account that you currently have. 

And there are numerous reasons why one might want to close an account, but oftentimes the thought of dealing with it makes you groan. 

While dealing with banks can sometimes be a hassle, it’s better for your finances and financial health to close your account if you no longer need it.

Many banks might charge lame “maintenance fees” as they call them or other charges, which can be avoided by taking action. 

If you need to get rid of a particular bank, then it’s important you take the time to move your money as soon as possible and close the account.

Closing a bank account is not exactly a fun, but it’s also not that challenging or as time-consuming as you may think! 

Why You Might Want to Close A Bank Account

There are a few reasons why you may want to close a bank account: maybe you’re having problems with your current bank and really want to switch.

Or maybe you have a good reason to open a new bank account with another financial institution and don’t want to leave your other accounts open. 

I put together some of the main reasons you may be considering closing your bank account:

Being overcharged

Many banks and current accounts charge you for opening an account, completing transactions, getting into overdraft and just for having an account. You may also be charged if you don’t meet minimum requirements or are not active enough on your account. 

If the fees are too high or you’re being charged some monthly fees and you don’t see the point in still paying for them, it’s time to change banks. Sometimes it’s simply not worth it. I know one well-known bank that was charging almost $10 a month for “account maintenance.” 

A fancy way of charging you rent to park your money in a checking account with them. It’s not a lot of money, but $120 per year for no reason? Pass!

Bad customer service

If you keep having terrible customer service and issues with your bank, you may not particularly enjoy banking with them. A bank where you feel you aren’t taken seriously or there is no real relationship can encourage you to look elsewhere. 

No bank or financial institution is perfect, but if they are not taking pride in their customer service, what makes you want to trust them? 

Low tech

Many banks are still catching up with online banking and modern ways to manage money. If your bank has a clunky app, isn’t up to date with necessary technologies, bad online experience, and is difficult to deal with, moving to a more modern bank can be a good alternative. 

No availability

Sometimes doing all your banking online won’t work either, and if banks close at 5 p.m. and you don’t live close enough, doing your banking in person gets complicated. 

So if you’ve recently changed location and like having a bank branch close to you, consider switching banks to the one that has a branch that is closest to you and more readily available for your needs. 

What To Do Before Closing Your Bank Account

Although you may have made the decision to close your bank account, before going through the process there are a few things to do first. By following these items, you’ll deal with less frustrations and ensure a smooth transition.

Get organized

Besides working on your mindset with finances, being organized is one of the most critical aspects to any financial success. It helps you stay on top of items and inform you about your various accounts and current state of finances. 

Before you close a bank account, get your banking information organized. Write things down, create a folder with your paperwork, etc. 

This will include:

  • Know what money is in what accounts
  • Write down any accounts link to that bank account
  • Familiarize yourself when bills are taken out during the month and when you get deposits from your job

A good way to stay financially organized is to use Personal Capital and Savology. Both are free to use and will help you understand your net worth, investments, spending, budgeting, and more. 

Read your bank’s closing terms

We all know that banks have plenty of financial mumbo jumbo and a lot of paperwork that comes with your current bank account. 

Much of the content might seem like a completely foreign language to you, especially if you are still working on your financial literacy

But that’s okay! 

What you want to look for is the terms about closing an account with them. Read the fine print and their rules when it comes to closing your bank account. You don’t want to assume anything when you go to close a bank account or be surprised by any fees.

How Do I Close A Bank Account?

To close the account, call your bank, visit the bank in person, or write a letter to their offices. Your bank will have you sign an account closing form to make it official.

If you don’t withdraw the cash first, then your bank will send you a check when the account has closed.

1. Open a new account

The first step to closing your bank account is to first open a new account. This is so you make sure you have all your money somewhere safe and don’t risk losing anything in the process. 

You may already have a bank in mind — but if not, start doing some research and see what kind of bank would fit your needs best.

You’ll likely want to pick a bank that has a branch that is closer to your home, doesn’t overcharge in fees (helps you avoid overdraft fees completely), offers savings accounts as well as checking accounts, etc.

Do a little bit of research and then settle on one specific bank account. Check whether your new bank account has a “switch kit,” which is a checklist along with certain forms to help you complete the switch from your old account. The switch kit is not an essential part of the process, but it can certainly make it easier and assist you during the process. 

Many people have multiple bank accounts already, which may make your life easier when you are ready to close an account. But if you are looking for a new bank or maybe an online-only bank, then it’s good to do some initial research too. 

Best Online BanksHow to Bank BetterGet Started
CIT Bank Online Banking 
Savings Builder
Learn More
Radius Online Banking 
Rewards Checking
Learn More
Consumers Credit Union Rewards Checking 
Financial Tools
Learn More
Aspiration Socially-Conscious Banking 
Fee-Free ATM
Learn More
Ally Bank Savings Account 
No Minimums
Learn More
Ally Bank Online Banking 
Interest Checking
Learn More
Chime Mobile Only Banking 
Get Paid Early
Learn More

2. Update recurring payments

Once you have opened your new account, you’ll then need to update your recurring payments.

Get a list of all your payments including bills, transfers and debt payments, then start cancelling them from your previous account so you can then set them up with your new one. 

Do this process well in advance of the next payment so you don’t risk being charged twice or falling into overdraft. 

And don’t forget, your recurring payments also include your direct deposits! 

You’ll want to make sure your income is coming into the correct bank account, so you’ll need to talk to your company’s HR department and make sure they update your deposits to the correct account and routing number. 

It may take a little time to go through so make sure you do this well in advance and don’t risk receiving your salary too late.

Other things to keep in mind include if you have automatic withdrawals for investments, life insurance, or anything else. It’s easy to lose track of these or forget to update, which is why I recommended writing everything down before this process begins. 

3. Clear all your charges

Before transferring money out of your old account, you’ll want to make sure you process all your payments — not just the recurring ones. This could be checks that haven’t cleared yet or payments that take a little longer to go through. 

If there are some checks or automatic payments that are still pending, make sure they are deposited before you transfer money out of your account.  

You wouldn’t want to end up in an accidental overdraft that could affect your credit score and cost you extra money. 

If you’re not sure about which payments still need to be cleared, consider waiting a while and keeping a minimum balance on your account to cover any potential charges.

Additionally, if you owe the bank anything from previous overdraft fees or loans, make sure you work that out before trying to close the bank account. 

4. Transfer money

Once you are certain you’ve cleared all your charges and you won’t risk falling into an overdraft, it’s time to transfer all the money on your account onto your new account.

Make sure to check if your old account has a transfer limit, so you know how much you can transfer in one go without incurring any fees.

If this is the case, then simply transfer the balance you owe bit by bit. If your new account has a minimum balance requirement, make sure to transfer this initial amount as soon as possible. 

5. Close all accounts

Once you’ve transferred all the money out of the old account, you can go ahead and close it.

You’ll want to make sure that you close all the accounts that may be related to it, such as a savings account or an extra money market account.

The closing process can take a few days, weeks, or even months to complete. This is why it’s important everything is in place in your new account so you don’t risk getting your old account re-opened by an automatic payment. 

Depending on your bank, there are a few ways to close your account.

You could head to the closest bank branch and go through the process with a bank teller. You can send a letter asking to close your account or make a phone call. Some accounts may allow you to close your account online too.

6. Keep records

Once you receive a letter confirming that your account has been closed, it’s important to keep the letter along with all the account information you’ve had over the years.

This is so you can easily monitor the account and have records in case of fraudulent activity or issues with the bank. You’ll also be able to use this as proof if the bank tries to re-open the bank account and charge you. 

Document everything, from the paperwork, people you talk to, dates you talk to them and date you closed your bank account, etc. You never know when this detail will be needed or valuable to you. 

7. Destroy cards

Your account is now closed and you won’t be able to access it or use it.

You’ll want to destroy any checks or cards that are linked to that account so you don’t accidentally try to use them or they get stolen.

Make sure to shred the checks and cut up your debit cards so no one else as access to them or your information.

Closing A Bank Account FAQ

Do you get charged for closing a bank account?

In some cases, your bank may charge you to close an account. Some banks will charge you a fee if you close a bank account within 90 – 180 days of opening it. If you are in good standing with the bank and they have a fee to close an account, you can also ask for the fee to be waived — which they may honor.  

Do you need to close a bank account in person?

In most cases it might be easier to close a bank account in person, but you might be able to over the phone, through a letter, or even online. This will depend if you owe the bank any money first. You will need to complete a form to make sure the account closing is official and secure.

Can you close a bank account online?

Depending on your bank, you may be able to close your bank account online. In order to do this, you’ll need to make sure there are no funds in your account and you don’t owe your bank any fees. Ensure you look into your account or read the bank FAQ to know what is possible. 

Can I close a bank account over the phone?

Yes, you can close a bank account over the phone. You may be asked to complete a form or submit a form in writing in addition to the phone call. If you haven’t transferred your money out, you’ll receive the rest of your money through a check.

How long does it take to close a bank account?

Some banks will take a few days for them to close your account, whereas others could take over a month. In order to speed up the process, make sure you transfer all the funds out of your account and don’t owe your bank any fees.

What happens if you don’t close your bank account?

If you don’t close your account, you may still be charged penalties and fees. You may also receive a letter from your bank declaring your account dormant and unused. Instead of leaving it idle or taking money from you, take the initiative to shutdown the account.