How to Close a US Bank Account

There are many reasons why you might want to close out your bank account. Maybe you’re moving out of state or to an area that doesn’t have branches for your current bank. Or, you may have found a bank that offers better services, lower fees, or other desirable features. It’s also possible that, like many Americans, you’ve chosen to move to a bank that’s fully online.

Whatever your motivation, you’ll want to make sure you close out your current bank account properly and within the parameters needed to avoid any disruption of your banking needs. Read on to learn how to close your account and move to a new financial institution.

Before closing your current account, you’ll want to explore alternative banking options to open a new checking account and possibly a savings account too. You may want to get recommendations from friends, family, or co-workers, read online reviews, and consider the different services offered by potential banks or credit unions. You need to decide what is important to you and find a bank that meets your current and future expectations, says Young Pham, a finance and banking expert and co-founder of Biz Report.

Other services to consider include online payment options, available loans, credit cards, and other relevant offerings. Additionally, inquire about the bank’s physical presence (such as the number and location of branches) and the size of its ATM network.

And don’t forget to be mindful of fees —which can take a substantial bit out of your budget or savings — including monthly maintenance, overdraft, ATM fees, etc. You should also find out if you need to maintain a minimum balance and if the bank requires a minimum deposit to open an account.

As you wind down your old account, set up scheduled payments, deposits, and withdrawals with your new account to avoid missing any payments. Take note of all automatic transactions in your old account, paying particular attention to credit cards, mortgage, utility bills, and other essential payments.

You’ll also need to reroute direct deposits by completing the necessary paperwork and taking note of the start date of the newly scheduled deposits. Once confirmed, schedule payments and withdrawals from your new account, ensuring you cancel corresponding transactions in your old account. As a precaution, it’s a smart move to maintain enough funds in the old account to cover any overlooked checks or automatic payments until you’re certain everything is up and running.

Once you’ve ensured that no more automatic transactions are linked to your old account, you can transfer the rest of your money to your new account. One of the easiest ways to do that is to transfer your funds electronically. But keep in mind that it may take a few business days to land in your new account.

If you prefer, you can always go to your old bank, withdraw the cash, and then deposit it at your new bank. If you decide to go that route, it’s a great opportunity to confirm with your bank that you performed all the necessary steps to finish closing your old account.

After completing the final transfer, initiate the closure of your old account. Typically, this involves calling or visiting your financial institution, though some banks and credit unions allow online closures. You may want to download any statements you think you’ll need before the closure is finalized.

Keep in mind that some financial institutions may charge a fee for closing an account if you haven’t had it for long. For example, some banks will charge you if the account has been open for 90 days or less. In that case, you can leave the account open until you’ve passed that point. Just be aware of any minimum balance requirements so you keep enough money there to avoid incurring any additional fees.

Also be sure to pay off any outstanding overdrafts you might have to protect your credit history, says Pham.

It’s also a good idea to obtain written confirmation that your old account is closed. Some banks will notify you via email and send a final account statement by mail but specific procedures will vary by bank. Once closure is confirmed, be sure to destroy any remaining checks and debit cards associated with the closed account for security reasons.

While some banks allow online closures, others may require in-person, phone, or mail requests.

Your bank or credit union might charge a fee to close your bank account, particularly if you shut it down soon after opening. Be aware of potential fees to avoid surprises.

In many cases, it should take only one or two days to close a bank account. However, the process could last longer if any errors occur.

The mere act of closing a bank account won’t hurt your credit. However, if your account isn’t in good standing, prolonged negative balances could impact your credit if turned over to a collections agency.