Opening a bank account may be easy, but closing one takes a lot more effort. Many consumers are turned off by the hassle, effort and fees in the process of closing a bank account. However, you don’t have to worry much if you have a planned approach. If you’re looking to close a bank account, then be sure to check our simple and easy steps to avoid any fees.
I advise you to take right steps when switching banks to ensure a seamless transition and free yourself from plenty of headaches. Here are the steps to take when closing your bank account
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Table of Contents
Deciding Where to Move The Money
If you plan to have all your funds back in cash, then this is not really your main concern. However, you will eventually need a place to transfer your funds. This is simple since you can choose an existing account to transfer your funds or open a new one at a bank account.
Whether you’re moving banks because you’re not happy with your current one or simply because you’re moving to a new area, you want your new bank account to fit your needs. To avoid any additional fees, look for a free checking account. Once you find that new bank, see if they offer a “switch kit”, which is simply a checklist and forms that instructs new depositors and billers about the change in accounts.
Find a New Bank
Before closing your old bank accounts, you should have a new bank ready to receive your money. When closing an account without a new bank, you may find yourself inconvenienced when you need to write a check, transfer money or pay a bill.
Switching Your Direct Deposit
If you have a direct deposit set up whether it be from work or from another source, then be sure to switch them when you open a new bank account. This can typically be done online. If you need assistance, then be sure to have your account and routing number on deck when you contact a Human Resource representative.
This also applies to any investment or brokerage accounts you have connected to your old bank account. Be sure to update the information on your investment and brokerage accounts so that they reflect your new bank account.
When it comes to these type of payments, they can range from car payments, rent, Netflix, gym membership. It helps to look at your bank statements from the past year to see what your spending habits are like.
Once you have your list of payments, you can start cancelling any ones that you don’t need and transferring ones you still use to your new bank account.
Doing this will prevent you from paying twice on the same services. It will also protect you from overdraft fees that might happen if you’re paying with an empty account.
Once you change your bank information, these changes apply to your payment accounts instantly.
To ensure that all your transaction have been transferred successfully, be sure to wait up to 14 days. When closing checking accounts, wait for any outstanding checks to clear. During this point in time, avoid using your card. Just be sure to stay above the minimum balance.
Emptying Your Account
After you update all of your payments and deposits, it’s time to transfer funds to your new account. Before doing so, be sure to check if your old bank or your new bank has any transfer limits because you might not be able to transfer them all at once.
Due to online transfer in this modern day, you can easily move all your funds back and fourth to your new one. Just be sure to check and see your limit on transaction per cycle period. Moving money can take upwards of 2-7 days depending on the bank you partner up with.
Closing The Account
After all your funds have been successfully transferred, you can then proceed to cancel your account. Try to do this as soon as possible to avoid any fees your current account may have.
When doing in person closure, be sure to have your identification on hand. For any funds remaining, the bank will give you either a certificate, or they will mail a check to your address.
No matter which way you close your account, you’ll want to obtain written confirmation from your bank that you closed your account. If you’re wondering why you need a confirmation letter, it is because you might fall victim to “zombie” accounts, which are accounts that are opened by the bank whenever another company tries to withdraw money from it.
These cases tend to happen when you’ve forgotten to update the information on the automated bill pay. In case anything were to happen, you have financial record of this. It can also come in handy as proof of closure if your old bank resurrects your old account to make future payments.
Once everything is done, be sure to get rid of your card of your card completely in a way that it cannot be recovered. Be sure to file all your paperwork in a safe place to keep your account secure.
Overall, when choosing to close your account, be sure to prepare for it. This makes sure that you don’t run into any hassle when closing your account. Be sure to follow and take our steps to avoid any fees! Check out our Best Bank Promotions & Bonuses as well as save money here at HMB!