How to Close Your Checking Account In 5 Simple Steps

Last Updated: July 20, 2019
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Closing your bank account doesn’t seem like a complicated thing to do as many people think.  Surprisingly, there are quite a few steps to follow and actions to do so you can properly close your account. Here are 5 simple steps you should take in order to close your account

If you follow the right process, you can spare yourself from unnecessary charges, fees, and complications.  Closing a credit card or a line of credit will impact your credit score – closing your bank account does not affect your credit score.

By doing the right steps when you switch banks, you could have a better transition from your old bank to the new and spare yourself from a lot of headaches.

1. Open Your New Account (Before Closing The Old One)

Make sure that before you close your old bank accounts, your new account is in place in your new bank to receive your money.

If you close your bank accounts before you start looking for a new bank, you could have a problem in case you need to write a check, transfer funds, or simply pay your bills.

You can start by scouting for the best checking accounts in the market.  That way, your shortlist will be about the best the market can offer.  Once you’ve narrowed down your choices, find out if they offer a “switch kit”.  A good “switch kit” includes checklists and forms to instruct depositors and inform billers about the change in your accounts.  These will help for a more seamless account transfer process.

2. Transfer Automatic Payments and Recurring Transactions

Many consumers have already automated much of their finances such that a number of their bank transactions already happen automatically.  Those who switch banks often find that such move affects the flow of their money and that they need to re-establish the links to continue the efficient cycles of their transactions.

Refrain from paying your bills with your old checks and allow all outstanding checks to clear completely before you close your account.

Check online for your issued checks that remain outstanding and do a bank reconciliation so you’ll know what has cleared and what has not.  Remember to remove all automatic payments you have set up through your old account.

Go through your bank statements for the past six to twelve months to identify which automated transactions you should reroute to your new bank.  These could include rent, utility bills, direct deposits, and automatic fund transfers.  You may also discover some recurring transactions that draw money from your old accounts.

  • Payments you set up in your bank’s online bill pay system. Rerouting your automated payments consists of two steps.  As soon as you’re done scheduling the payments in your new account, you must turn them off in your old account.  If you don’t do that, you might pay twice the same bill.
  • Payments that you’ve set up elsewhere that automatically withdraw from your account. Maybe you have an auto loan or home mortgage whose payments go through the ACH.  Don’t ignore the minimal payments such as a Netflix subscription, or those transit passes that automatically reload once their balance dips below a certain threshold level.  For these accounts, simply supply the biller with the details of your new account.
  • Deposits such as direct deposit from your paycheck or Social Security benefits. In some cases, you may need to complete new paperwork and/or provide a voided check to change them over to your new account.

There are some billers who will require a substantially advanced notice (e.g. 30 days) to be able to process your transfer or application.  Some may consume a full billing cycle or even two, so you may have to pay your bills manually for the time being.

3. Transfer Your Money

After you’ve updated your payments and deposits, you can begin to transfer funds to your new account.

 It is not necessary to inform your old bank that you plan to close your account.  Pay attention to any transfer limits because it may prevent you from transferring your whole balance all at once.  If that is the case, you will have to transfer your balance on a staggered basis.  Don’t forget to leave the minimum maintaining balance in your account should the bank imposes that requirement.

You can transfer your money without paying fees by using these 3 methods:

  • Wire transfer. This is the easiest and safest way to move your money from your old account to your new account.
  • Cash-out. If you have the time, you can make an in-person visit, withdraw all of your funds over-the-counter and deposit them in your new account.  Having cash in your new account gives you immediate access to the money.
  • Write a check. If you don’t want to carry a large amount of cash, you can simply issue a check to yourself from your old account and deposit it in the new one.  The only downside is, the check will take a few days to clear so you won’t have access to it immediately.

Once everything has cleared your account, you can already close your account.  If you don’t want to do it face-to-face, you can just write a letter requesting that your bank close your account.  Provide them with your name, address, and account number then sign it with the same signature you used when you opened the account.

Monitor Your Accounts

Check if you’ve switched over everything and things are running smoothly in your new account.  Confirm that the cheques you wrote on your old account have all cleared the bank.  You can do this yourself by reviewing your statements or viewing your online statements.

4. Close The Account

Finally, go to the bank and ask them to close your account.  If you have not moved everything out, the bank will return to you the balances in your bank by issuing a check.  Many depositors have complained about “zombie” accounts, which happen when a bank re-opens an account because a company has attempted to take money from it.  They often reactivate closed accounts because of billing errors or there is an open automated bill payment that the owner forgot.

There are not too many ways you can close your account.  You can close it with a bank representative by heading to your bank’s nearest branch to do it.  This is the most traditional and straightforward way and you can ask the representative any question you might want to ask.

If you don’t’ want to speak person-to-person to a bank employee, you can close your account online.  There’s no uniform process for all banks in doing this.  Normally, you’ll have to contact customer service through your secure messaging system and request for account closure.  Some banks may require that you call customer service or submit a form to properly close the account.

5. Get a Confirmation

Secure a written letter from your bank that documents all the details of your account closure.  A paper trail is essential to an orderly financial life and could help you in the future should you need the letter to settle a dispute.

Although you’ve closed the account, save all your bank statements.  They are part of your financial records and good pieces of evidence for future tax reconciliation.