How to Close A Bank Account

You'll have to do a little prep work before closing a bank account.

A young woman holding her credit card while using her cellphone at home.
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Whether you're closing your bank account to move to a new state, find lower fees or to get a better customer service experience, you'll first have to do some housekeeping. Your bank account is likely tied to subscription accounts, utilities and other services, and you'll need a place to put your money before you move on. After that, closing the account itself should only take a few minutes.

How to close a bank account

1. Open a new bank account

Before you close your bank account, you need to open a new one to ensure you have a place to transfer direct deposits and automatic payments or debits. Many banks offer online applications, while others ask you to visit a branch in person. In any case, you'll need to provide some basic information to open a new account. You may also be required to provide some identifying documents, for example, a government-issued ID.

2. Cancel recurring payments and direct deposits

Before contacting your bank, you should ensure all your monthly deposits and payments are being sent to the new account. These may include:

  • Payroll or direct deposits
  • Bill payments and automatic transfers
  • Subscriptions, gifts or recurring donations
  • Credit card payments or transfers
  • Student loan payments

Note that if you close your bank account, your direct deposit will be returned to the original sender. If you don't change your direct deposit information and cancel your old account, it'll get sent back to your employer.

3. Transfer your money

The next step is to transfer the money out of your account, but make sure any pending transactions have cleared before you do so. You may be hit with overdraft fees if you move your money out of the account with a few pending transactions on the backend. If you still have money in your account after everything clears, initiate a transfer to your new account or withdraw it. Additionally, keep in mind if your bank has a minimum balance requirement or not so you aren't charged a monthly maintenance fee.

4. Contact your old bank

Call your soon-to-be-ex-bank or send a secure message through your online banking account to confirm that there is no money left in your account. This will also alert them that you're about to close your account, which is important for any remaining scheduled payments. Once the bank confirms the account balance is at zero (all your checks have cleared, and there are no outstanding charges or fees), you can ask the bank to close the account.

Some banks require you to send written notice that you want to close your account -- if so, they can provide you with a template form requesting to close your account. The letter should include your full name, account number, bank name and date. You may also want to include the last four digits of your Social Security number to help verify your identity.

After you've requested that your bank close your account, ensure you've received written confirmation that the account is closed, adding an extra layer of protection in case a problem arises later. 

How to close an inactive bank account

If your bank account has a zero balance and has not had any activity for a long time, the bank may deactivate it. If you want to close it, you'll need to reactivate it first.

You can do so by logging into your online account, using your card at an ATM or an in-branch terminal, or contacting the bank's customer service. Once it's reactivated, follow the general steps above for closing a bank account.

How to close an overdrawn bank account

You'll need to follow the same steps as you would for deactivating any other bank account -- opening a new account, switching your scheduled payments and deposits and transferring your money. Depending on how long the account has been overdrawn, you may need to pay overdraft fees to make the account current. Before moving forward, you'll need to take care of any payments and ensure your balance is at zero or higher.

Depending on the bank, it may take from a few days to a few weeks for the bank to check the account to ensure it's in good standing and that all outstanding issues have been resolved. If you have any money remaining in your soon-to-be-closed bank account, you have the option of either requesting a transfer of those funds to your new bank account or receiving a check in the mail.

How to close a bank account for a deceased person

Closing a bank account for a deceased person may vary depending on the bank. Generally speaking, you'll need to provide the death certificate, proof of executor status and identification.

If the owner of the bank account has named a beneficiary, the bank will release the funds to this person once the account holder's death is confirmed. If there is no named beneficiary, the executor of the estate would be responsible for using the money to repay creditors and dividing the remaining funds according to the deceased's will.

For joint accounts, the surviving account holder(s) will retain ownership of the account and the money in it. If the joint account's only surviving holder is a secondary account holder, the account will need to be closed. The bank account will still pass to the named beneficiary if someone dies without a will.

Does it cost anything to close a bank account?

It typically costs nothing to close a checking, savings or money market account, and the process can be quick. Certificates of deposit and other time deposit accounts, for example, may levy an early withdrawal penalty if you close the account prior to maturity.

There is no standard fee for closing a bank account, but you may be charged for things like having a negative balance or outstanding fees.

Does closing a bank account hurt your credit?

Bank accounts aren't factored into your credit report, so closing a bank account doesn't affect your credit score like closing a credit card account does. The mere act of closing a bank account doesn't have any direct impact on your credit. 

Can you close a bank account online?

Many banks allow you to close an account online, but some may require a phone call or visit to a local branch. Read the terms of your banking agreement to find out the policy on closing an account.

The bottom line

Closing a bank account can be quick as long as you get all of your ducks in a row before initiating the closure with the bank. Once you withdraw or transfer funds to a new account and take care of any lingering transactions or debits, the process may only take a few minutes. 

Correction, 7:30 a.m. PT Jan. 25: We've replaced phrases that were not entirely original.