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.
1. Choose a new bank account
Before closing your old bank accounts, you should have a new bank ready to receive your money. You should look for accounts with services and features that best suit your needs such as:
- No monthly fees. Look for a free account or one that has an easy way to waive fees such as satisfying a low minimum balance or account activity requirement.
- Easy access to funds. Look for an extensive ATM or branch network and the ability to transfer money online fast.
- Perks. This could mean a competitive interest rate, a sign-up bonus, ATM fee reimbursements, or other benefits.
- Better customer service than your previous bank. This is subjective, so consider contacting a prospective bank’s support team to see how helpful it is.
There are a few different types of financial institutions to choose from like banks, credit unions, and nonbanks. Credit unions are like the not-for-profits to banks while nonbanks are partnered companies with banks that offer federally insured online checking or savings accounts.
Frequently Asked Questions
- Does closing a bank account hurt your credit?
- Closing a bank account typically will not hurt your credit score. Experian, Equifax and TransUnion won’t collect information about checking or savings accounts.
- You should never have unpaid fees or an overdrawn balance at the time of closing because you’ll receive a negative record on file with the consumer reporting agency ChexSystems. A ChexSystems report won’t affect your credit, but having unpaid debts can.
- What do you do if a bank refuses to let you open a bank account?
- If a bank does not let you open a bank account, then that means the bank wasn’t able to identify you or you might be blacklisted.
- If they couldn’t verify you, simply contact the bank to and confirm your personal details and try again.
- If you are blacklisted, you may need to pay overdue debts with a bank or clear your ChexSystems record. Majority of banks and credit unions use ChexSystems to filter potential customers. Here are five steps to clear your ChexSystems record.
- Is there a fee to close a bank account?
- No. However, you might owe a fee if you choose to close an account shortly after opening it. This early account closure fee happens if you close an account within 90 or 180 days.
2. Open it
Be sure to bring your ID and other personal details that you might need to apply at the new bank’s website or branch. You can fund your new account by linking an existing account to transfer money or through cash or checks at a bank branch. Get more information about how to open a bank account.
Keep in mind that it is possible to have more than one checking or savings account. We recommend you having multiple savings accounts as it is a strategy to save money.
3. List recurring deposits and withdrawals on your old account
Check back on recent bank statements or your transaction history to create a list of all your deposits and withdrawals such as direct deposits, bill payments, subscriptions, automatic transfers, and others. It helps to look at your bank statements from the past year to see what your spending habits are like.
4. Move your money and automatic transactions to your new account
Update your bank account information on all services you pay for such as Netflix, your gym membership, or rent. For those who receive direct deposits from your work place, simply talk to your employer and ask if they can use your new checking account (for more details, see our guide to setting up direct deposits). You must be patient because the process for moving your money and automatic transactions to the new account can take weeks or months.
5. Close your old account and double-check it’s closed
Contact your bank by calling, visiting a branch, or using an online method such as live chat to close your account. Once an account is closed, you’ll want to obtain written confirmation to avoid “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.
More things to know about closing a bank account
Can you close a bank account online?
Depending on your bank, they most likely have different policies. You would have to check with your bank to see. Some allow you to simply message or chat with customer service online, while others require you to call in.
Can a bank close your account without your permission?
Yes, but this only happens if your account had an unpaid negative balance from overdrafts or fraudulent activities are going on. You can learn more about ChexSystems if this happened to you.
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Bottom Line
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!
