How To Close a Savings Account Properly

Article Summary:

Closing a savings account at banks or other financial institutions is usually not difficult. You just need to go in person, call customer service, or request the closure in writing. However, in order to close a bank account properly, you need to make sure you settle all balances beforehand. All of your direct bill pay and subscription services need to switch over to a new bank account or new payment method as well.

Perhaps you have a bank that you’ve used all your life. You know the tellers by name, can walk or drive there in your sleep, and generally love the good vibes you get when you walk in. However, times can change, and maybe this bank doesn’t suit you as it once did. Maybe you are moving or you found an account with better benefits. Whatever reason you have for closing your savings account, don’t worry. It’s pretty easy, and as long as you follow these steps, you should be able to close your account and never look back.

How to close a savings account properly

Follow these four steps to close your savings accounts so you can move on, worry-free.

1. Settle unpaid balances

Before you make any sudden moves trying to close your account, make sure that you do not have any unpaid balances or overdrafts and the corresponding fees that banks and credit unions charge. If you are not sure how to check your balance, you can call the bank and speak to a teller or customer service rep. If you close your account and have unpaid balances or overdrafts, you could then be sent to a collections agency, which will try to collect what you owe.

Pro Tip

Does closing a bank account hurt your credit? No, closing a bank account will have zero effect on your credit. But closing a bank account with overdraft or unpaid balances can indeed have a very negative effect on your credit report.

2. Make sure you have an alternate account set up

Don’t close your account unless you have a new one set up or an alternative account where you can transfer the balance. Cash under your mattress does not qualify as a bank account. Make sure you have a full understanding of your new account’s details so it’s easy to switch over. A new checking account and savings account are a must before you sever relations with a bank.

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3. Update your direct deposits, bill payments, and subscriptions

Typically these will come out of your checking account, but don’t forget any auto payments that come out of the savings account you are closing. Whether you work for an employer or are a freelancer, make sure that your employer or clients are aware of your new account’s direct deposit information. Particularly if your clients are overseas, SWIFT codes and corresponding banks can cause confusion, so make sure you have all this information and the relevant parties are notified. If you have automatic bill pay or other automatic payments, switch those to the other account. And if you have subscription services such as Netflix or Spotify, make sure the payment details are updated and not tied to your old account.

4. Transfer the remaining funds and close the account

The last step is to transfer your remaining funds to your alternate account and then close the original account. Unless you just want to keep the cash, you would have to deposit it again anyway. Once you transfer money, there are two ways you can close your savings account and/or checking account. Unfortunately, most banks will not let you close a bank account online. The guaranteed way is to go in person to a bank branch with your government-issued ID and close it. You could also call your bank and speak to a customer service representative or send a written request to close it. But depending on where the account is and how much money is in it, those options could prove to be more of a hassle than going in person.

Pro Tip

If your savings account contained a large amount of money, some banks inside and outside the U.S. might be uncomfortable closing it. If you can’t close the account in person, you might consider giving power of attorney to a friend or relative who can close it on your behalf. As POAs may cost you some money in legal fees, this is a last-resort option.

Once it’s gone, it’s gone

Once you close the bank account, that bank account is dead and buried, never to rise again. That doesn’t mean you can’t open up other savings accounts at the same financial institution. It just means that the exact account with all its corresponding numbers will never be available to you again.

Keep track of everything

Make sure you keep track of everything related to the account, both when you operated it and when you closed it. All documents, bank statements, and written conversations should be documented and stored. You never know if you will get audited or if this information might be important when trying to get a loan. In a digitized world, this shouldn’t be too much of an ask.


If I close my bank account, what happens to my money?

Ideally, you would have transferred all the money to a different bank account before closing it. If not, the bank will probably send you a check with the remaining balance. If your bank is FDIC-insured, your deposits should be protected up to $250,000.

Can you close a bank account with a negative balance?

Yes, but a closed bank account with a negative balance will affect your credit score. Your account will most likely be sent to a collections agency to recoup the money.

Can I close my bank account and open a new one with the same bank?

Yes, you can. However, you will have a different account number than the one from your old savings account or checking account.

Key takeaways

  • There are many reasons for closing an account. But if you decide to close your savings account, it’s important to make sure it’s done properly.
  • Before you close your account, settle all unpaid balances or overdrafts, get a new or alternative account, and transfer all of your direct deposit and bill pay information.
  • You can close your account by walking into a bank branch or calling customer service. Many financial institutions will not let you close your account online.
  • Once you reach total account closure, that specific account number is gone forever.
View Article Sources
  1. Are My Deposit Accounts Insured by the FDIC? –
  2. Should I Open a Savings Account and Why? – SuperMoney
  3. Is It Okay to Open and Close Bank Accounts? – SuperMoney