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Bank of America vs. Citibank: How Do They Compare?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Huge, multinational banks like Citibank and Bank of America used to be the primary go-to for nearly all banking customers. Though competition from online banks has taken some of their customers, they still remain industry stalwarts that many customers think of as their first choice when it comes to banks.

Both of these institutions offer nearly any banking service a customer could desire, and both boast an international reach. This is one of the main advantages that large banks such as Bank of America and Citibank have over online banks and credit unions — global reach and support, coupled with the ability to access your money and even talk to a banker in person nearly anywhere in the developed world.

When it comes to a head-to-head comparison of these two banking behemoths, the main difference is in CD and savings rates, where Citibank has the edge, and access to ATMs and branch locations, where the verdict is a split decision.

Bank of America vs. Citibank: A brief overview

In many ways, Bank of America truly is “America’s bank,” as the company traces its roots back 240 years. As Bank of America’s website says, its heritage banks helped grow the whaling industry in Nantucket, rebuild Chicago after the Great Fire and develop the first nationally licensed credit card, which ultimately grew to become Visa. In 1998, BankAmerica merged with NationsBank to become the country’s first coast-to-coast bank, and on Jan. 1, 2009, the bank acquired brokerage firm Merrill Lynch, making it the biggest bank in America at the time. Today, Bank of America serves one out of every two American households, with nearly $2.4 trillion in assets.

Not to be outdone, Citibank traces its roots back to 1812, when it helped finance the U.S. government during the War of 1812. City Bank, as the bank was originally named, later played a role in some of the most important developments in American history, including financing the Union Army in the Civil War, aiding in the creation of the Panama Canal and supporting the financing for the Marshall Plan. The bank currently safeguards over $1.9 trillion in customer assets and is the world’s largest credit card issuer.

Both firms are global powerhouses, offering everything from basic banking services to advanced financial planning internationally. The two banks have been competitors for over 200 years, and as survivors in the industry, they both share a number of the same capabilities and services. However, there are some important differences between the two.

Bank of America vs. Citibank: How they compare on rates

Bank of America and Citibank both have a bewildering array of rates for their products, particularly in the checking account and savings account categories. Customers making larger deposits or paying additional monthly fees are entitled to better rates, as they move toward the designation of being “preferred” customers.

At the end of the day, however, rates for checking and savings accounts at both institutions are extraordinarily low and a far cry from even the national average rates — even for those with the largest deposits. The incremental gains earned by moving up the “preferred customer” ladder are negligible.

For example, at Bank of America, the savings account rate at the Platinum Honors Tier for deposits of $500,000 or more is 0.06% APY, which is not much more than the standard 0.03% APY for those who aren’t Preferred Rewards clients. Savings rates at Citibank peak at 0.15% APY for Citigold package customers depositing at least $500,000. Plus, there’s no interest-earning checking account at all for basic accounts at Citibank, and even interest checking with the top-tier Citigold banking package pays just 0.03% APY.

There is one huge and notable exception, however. In 2019, Citibank unveiled the high-yield version of its Citi Accelerate Savings account, which has a very high 2.05% APY. This type of account is more in line with what online competitors currently offer. However, the Citi Accelerate Savings account is not available in several states, including California, New York and Texas.

When it comes to CD rates, Citibank asserts itself as well. For both 1-year and 5-year CDs, Citibank’s rates are considerably above Bank of America’s. In the case of 1-year CDs for deposits of at least $25,000, Citibank’s rates are even quite a bit above the national average.

In a head-to-head comparison, there’s really no winner when it comes to basic checking and savings rates. Both banks offer abysmally low rates that will hardly make a difference to the average customer. For example, a standard customer with a $100,000 savings deposit will earn just $30 per year in interest at Bank of America. Things aren’t much better at Citibank, where a Basic Banking customer with a $100,000 savings deposit will earn just $60 per year. However, Citibank’s CD rates — and its Citi Accelerate Savings rate, for those who can access it — make the bank a much better option overall when it comes to rates.

One thing to note is that with both banks, rates vary slightly based on where you’re located. While we used rates for Los Angeles, rates were slightly higher in New York, for example. However, the change in rates based on customer location are minimal overall, with the exception that some states do not have access to the higher Citi Accelerate Savings rates.

 Bank of AmericaCitibankNational Average
CheckingBelow $50,000: 0.01% APY

$50,000 - $99,999: 0.02% APY

$100,000 and over: 0.02% APY
0.00% APY*0.202% APY
SavingsBelow $2,500: 0.03% APY

$2,500 and over: 0.03% APY
2.05%**0.284% APY
1-year CDBelow $10,000: 0.05% APY

$10,000-$99.999: 0.05% APY

$100,000 and over: 0.05% APY
Below $10,000: 0.25% APY

$10,000 - $24,999.99: 0.25% APY

$25,000 - $49,999.99: 2.00% APY

$50,000 - $99,999.99: 2.00% APY

$100,000 - $499,999.99: 2.00% APY

$500,000 - $999,999.99: 2.00% APY

$1,000,000+: 2.00% APY
1.365% APY
5-year CDBelow $10,000: 0.75% APY

$10,000 - $99,999: 0.75% APY

$100,000 and over: 0.75% APY
Below $10,000: 1.25% APY
$10,000 - $24,999.99: 1.25% APY

$25,000 - $49,999.99: 1.25% APY

$50,000 - $99,999.99: 1.25% APY

$100,000 - $499,999.99: 1.25% APY

$500,000 - $999,999.99: 1.25% APY

$1,000,000+: 1.25% APY
2.159% APY
*Rates vary based on the type of banking relationship customers have.
** Rates may vary based on location; this rate is only available in certain states. Rates pulled are based on the location of the bank’s headquarters.

Bank of America vs. Citibank: What account options are available?

Both Bank of America and Citibank offer a wide range of product options. Each bank offers checking, savings and CD accounts; both also offer money market accounts, though they are only available within an IRA. Though retirement money market accounts typically earn low rates of interest, they also tend to be low-risk, providing stability.

If anything, both of these banks offer too many account types, as there are an incredible number of subdivisions of accounts based on the size of your account and your customer status at the bank. For example, when you open a standard savings account at Citibank, it’s opened as part of one of five banking packages: the Access Account, Basic Banking, The Citibank Account, Citi Priority or Citigold. Depending on which banking package you open, your rate on your savings account will vary. Generally, the more money you have on deposit with Citi, the higher your interest rate, but again, the increase in rates is minimal at best. The Citi Accelerate Savings is the logical choice for most savers, but again, it is not available in all states.

Bank of America operates in a similar fashion. Interest rates vary based on how much you deposit and if you are a member of the Preferred Rewards Program, which has three tiers: Gold, Platinum and Platinum Honors. You qualify for these tiers based on your account size, with the top tier requiring an average three-month balance of at least $100,000. These tiers qualify you for interest rate boosts of 5%, 10% or 20% (depending on tier), along with other perks like fee-free withdrawals from non-Bank of America ATMs and free stock and ETF trades through the firm’s self-directed brokerage platform, Merrill Edge.

Figuring out what type of banking package you should have and how much you should deposit to earn the highest rates and pay the least amount of fees can be overwhelming. Nonetheless, if you’re looking for a variety of account types to choose from, you’ll certainly have a wealth of options at both Bank of America and Citibank.

 Bank of AmericaCitibank
Checking account
Savings account
Certificates of deposit
Money market account
*Money market account only available within an IRA.

Bank of America vs. Citibank: How they stack up on fees

Fees are the bane of most large, traditional banks, and to a large part, it is these fees that have accounted for the rise of numerous online banking rivals. Although there are ways around the fees charged by Bank of America and Citibank, there are numerous ways you can be tripped up by them.

At the time of publishing, Citibank, for example, charges $12 per month for its regular checking account if you’re in a Basic Banking package, but that fee goes all the way up to $30 if you’re a Citi Priority member. If you choose to have a standalone savings account, those fees range from $4.50 per month to $25 per month. These fees seem excessive in an era when countless online banks — and even credit unions and larger banks — offer fee-free checking accounts. With the Basic Banking package, the bank does waive the typical $2.50 charge for out-of-network ATM withdrawals for account holders age 62 or older.

Bank of America is no better than Citibank when it comes to basic account fees. Although waivable with a $1,500 balance, a qualifying direct deposit of $250 or Preferred Rewards client status, the Advantage Plus Banking account charges $12 per month, at the time of writing. Though there is an account option with a $4.95 monthly maintenance fee, Advantage SafeBalance Banking is a very basic account that does not offer checkwriting.

Overdrafts at Bank of America are a whopping $35, and the bank will charge that fee up to four times per day. Even overdraft protection costs $12. A standard savings account will set you back $8 monthly, although this is waivable as well with a minimum balance of $500, a linked Relationship Banking account or Preferred Rewards client status.

 Bank of AmericaCitibank
Standard checking account$12, waivable$10-$30, waivable
Standard savings account$8, waivable$4.50-$25, waivable
ATM fee$0 for in-network ATMs
$2.50 for out-of-network ATMs
$0 for in-network ATMs
$2.50 for out-of-network ATMs (can be waived in specific circumstances)
Overdraft fee$35, charged no more than 4 times per day $34, charged no more than 4 times per day

When to choose Bank of America

  • You want access to more physical branches.
  • You have a Merrill Edge investments account.

If you need to visit a physical branch, Bank of America should be your choice over Citibank. Although Citibank has an impressive 700 domestic and 1,800 international branches, they are dwarfed in number by Bank of America, which boasts 4,300 retail financial centers in the U.S. alone.

If you want the convenience and control of an online brokerage account while still banking with a brick-and-mortar giant, Bank of America has the answer for you with its Merrill Edge brokerage platform. Consistently rated among the best of its kind, Merrill Edge allows you complete control of your investment portfolio via low-cost trading while still offering access to financial advisors, if you so desire.

When to choose Citibank

  • You want easy access to customer service.
  • You want a larger ATM network.
  • You want higher rates on 1-year CDs and savings.

Many customers choose large, traditional banks for their customer service, and Citibank delivers in this regard. Citibank has so many divisions that there are separate toll-free phone lines depending on which department you need and what type of banking relationship you have. The important thing is that you can reach a live person 24/7. You can also live chat, visit a branch or connect by mail. Bank of America phone lines are only open for 15 hours during the week, and 12 hours on weekends.

The ATM network for Citibank is vast, with more than 60,000 surcharge-free ATMs available for use. This is considerably more than Bank of America, which lists about 16,000 ATMs.

While Citibank won’t get any medals for its basic checking and savings account rates, it does actually offer a few bright spots in its rate lineup. Citibank’s 1-year CD rates for those depositing at least $25,000 are actually quite good, and well above those offered by Bank of America. And if you live in a state with access to the Citi Accelerate Savings account, you’ll get one of the higher savings rates in the nation.

The bottom line: Is Bank of America vs. Citibank better?

Both Bank of America and Citibank have the best and the worst features of a large bank. On the plus side, you’ll never be too far away from a branch or ATM with either bank. Both banks have long-established reputations and trillions of dollars in customer assets, so you’re likely to find bankers that understand any financial problem you have and can offer a number of financial products to solve them.

On the downside, the interest rates that these banks pay on basic accounts are anemic. For the long haul, neither of these banks is generally a good place to park your money if you’re looking for a decent interest rate. Citibank’s new Citi Accelerate Savings account is definitely a step in the right direction, and an indication that the bank desires to compete with online banks for savings dollars. Again, however, you must be in a state that offers the account. So far, Bank of America hasn’t added such an option to remain competitive.

Citibank also steps up on its current 1-year CD rates, where a deposit of at least $25,000 will earn you a rate well above the national average and close to the best rates offered by online banking competitors.

On a head-to-head basis, the odds generally tilt towards Citibank over Bank of America. Although Bank of America has a much larger number of physical branches, Citibank has a much wider ATM network, and its high 1-year CD and Citi Accelerate Savings rates outgun anything offered by Bank of America.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

John Csiszar
John Csiszar |

John Csiszar is a writer at MagnifyMoney. You can email John here

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Banking

Review of EvoShare: Get Cash Back Toward Your Retirement

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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EvoShare is a web browser extension that you can use to get cash back for your 401(k) plan when you make purchases online at participating vendors. You can also earn cash back from some local stores.

Unlike other cashback extensions, your EvoShare earnings can only go toward your retirement fund, student loan or college fund.

One drawback is that you can’t enroll directly as an individual unless your employer is signed up for EvoShare. But EvoShare is a good option with little hassle.

What is EvoShare?

EvoShare, founded in 2015, provides you with cash back for purchases from certain online and brick-and-mortar retailers when you link your credit and/or debit cards.

The money comes from the retailers, who pay an additional cash back percentage as a referral fee to EvoShare to draw business to them. EvoShare simply shares a portion of this commission with its users, resulting in cash back.

EvoShare partners with more than 1,300 online businesses, including Target, eBay and Walmart, and over 8,700 restaurants, bars and stores across the country. Note that just because you can earn cash back from an online business doesn’t mean that you can earn cash back from the same brick-and-mortar store.

If you’re shopping online, the web browser extension will tell you how much you can earn from making purchases on a given website. Say, for example, you’re looking to buy a dress online from Macy’s. When you click on the Macy’s website, the EvoShare browser extension will show you that you can earn 3% of your purchase as cash back. Once you check out and pay for your purchase, you’ll see a notification that you’ve earned your 3% back.

Notably, EvoShare is only available as a web browser extension with Chrome or Safari, and not with other browsers such as Firefox.

For shopping in a participating brick-and-mortar location, any purchase you make with a linked credit or debit card will work similarly. You won’t get a web notification since you’re in a store, but you can check the website to see how much you can earn from various retailers.

Using EvoShare doesn’t cost you anything as a user, and it can be a good way to accumulate extra savings for doing the normal shopping you would do anyway. Unlike direct contributions to a savings account, you don’t have to worry about allocating any of your own funds to save using EvoShare, as everything is automated.

EvoShare earnings can be used for student loan payoff, as well as retirement or college fund savings. However, to get any cash back from EvoShare, you must use it in conjunction with a participating employer.

Earnings will flow directly to your bank account, via either an Automated Clearing House (ACH) transaction or physical check, and your employer will withhold the same amount from your next paycheck. Then, your earnings will be contributed to your account of choice.

Thus, if your selected account was your 401(k) plan, for example, your earnings would be treated just as if you made your own pretax contributions to your retirement plan. You can also use the earnings to save for your child’s student loan.

But you don’t need to have an active retirement plan or student loan account to begin saving. When you sign up, EvoShare will save your money until you direct it to make deposits into your new account.

How to use EvoShare

EvoShare is simple to use, but unless you’re hooked up with a participating employer, you won’t be able to sign up. Here’s the process for those who are eligible.

Step No. 1: Sign up online

You can sign up online with EvoShare, but first you’ll need a designated sign-up link from your employer. If your employer is not linked to EvoShare, you’ll have to contact them and encourage them to join.

Step No. 2: Link debit or credit cards

EvoShare only processes cashback payments when you use a linked credit or debit card. If you don’t register one of your cards, you won’t get any credit from EvoShare for your purchase. EvoShare accepts Mastercard, Visa and American Express. You can also register your debit card, but be aware that when you make a purchase, you must select credit as your payment type. If you provide a PIN and use your card as a debit card, you won’t receive credit from EvoShare for your purchase.

Step No. 3: Shop online and locally

EvoShare is partnered with more than 1,300 online businesses and more than 8,700 bars, restaurants and stores. The network is always expanding, so this number may continue to grow.

Retailers linked up with EvoShare include Macy’s, Kohl’s, Barnes & Noble and Nordstrom. You can search for any store on the EvoShare website to see if, and how much, EvoShare pays for that retailer. Similarly, you can search for local stores near your location, a process made easier if you let Google Maps know your location.

Step No. 4: Put money toward a retirement account, student loan or college fund

After you make a purchase, earnings from local retailers take anywhere from a few minutes to seven business days to appear in your account. Online purchases take from one to 10 business days to appear. These are just general guidelines, however.

Certain merchants, such as airlines, may not process your cash back until you take your flight. Other retailers may not process your payment until the return policy has expired, ensuring that you don’t get credit for a purchase that you later return. Earnings from online purchases are only automatically redeemed once you’ve earned at least $20. The maximum you can earn from any cashback transaction is $250.

Once your earnings are processed, you can only deposit them in a student loan account, a college savings account or your employer-sponsored retirement account, such as a 401(k) or 403(b) plan. Employer participation is also mandatory, as payments are ultimately made through the employer. After your cashback is processed, you’ll receive either a check or an ACH deposit from EvoShare. Then, your employer will hold back those earnings from your next paycheck and deposit them toward your designated account.

Pros of EvoShare

EvoShare‘s benefits are clear and straightforward.

  • No fees
  • Earn up to 20% cashback online or up to 10% in stores
  • “Forced” savings into student loan, retirement plan or college funding plans
  • Easy to use
  • Data not stored on site but through Empyr, using industry-standard safety protocols

Cons of EvoShare

There’s not much wrong with getting free cash back, but here are some of the drawbacks to using EvoShare.

  • No mobile app
  • No cash back in your own pocket; must go to savings vehicle
  • Can only sign up with a participating employer
  • Third-party delivery services are ineligible
  • Limited number of retailers

Some of these pros and cons are common with competitors in the industry, but some are unique to EvoShare, such as the requirement to work with an employer and the ability to deposit into retirement accounts.

How EvoShare stacks up to the competition

EvoShare is not the only cashback web browser extension available, but it is the only one with this unique configuration. Traditional cashback extensions send cash directly to users, which can be a plus, but they don’t offer the forced savings feature of EvoShare, in which the cashback goes into a designated savings account. Here’s a look at some of EvoShare’s most popular competitors.

Rakuten (formerly Ebates)

Rakuten operates in a similar fashion to EvoShare, with a built-in web extension that alerts you when you can receive cash back from shopping at particular stores. Just like with EvoShare, you can use your linked American Express, Visa or Mastercard credit cards to earn cash back, or debit cards as long as you select credit when making a purchase. Rakuten also charges no fees, just like EvoShare.

Rakuten has a bit of an edge over EvoShare when it comes to size, as it partners with over 2,500 stores online, including Amazon, Expedia and Macy’s. However, its in-store cashback options are limited, as it only partners with 80 or so brick-and-mortar retailers.

Rakuten does have a mobile app, something EvoShare is lacking. It also pays out quarterly via PayPal or a physical check, as long as your cashback balance is at least $5.

TopCashback

TopCashback is nearly a carbon copy of Rakuten, with a few additional benefits. Like Rakuten — and EvoShare — TopCashback pays cash directly to customers that use linked credit and debit cards to make purchases at participating websites.

However, TopCashback has no minimum payout threshold, and you can request your cash as often as you would like. TopCashback also typically pays users the entire cashback amount it earns from merchants rather than holding some back for its profit, as is the case with EvoShare and Rakuten. It earns money from clicks on merchandising banners and other referral deals it makes with participating merchants.

TopCashback also has cashback deals with more online businesses than either EvoShare or Rakuten, numbering over 4,400, including Walmart, eBay and Best Buy. However, TopCashback works with online merchants only. You cannot receive cash back for in-store purchases.

The bottom line: Is EvoShare right for me?

For some users, the decision whether to use EvoShare is moot. Unless your employer participates in EvoShare, you’re out of luck. However, if you work for a participating employer, EvoShare may be a good option for you.

The question as to whether EvoShare is right for you has many layers. Beyond the participating employer hurdle, you’ll have to decide if you’re comfortable with providing your debit and credit card numbers to an online service.

Although EvoShare doesn’t store your credentials, it does use Empyr, which keeps your information on record. Empyr uses industry-standard safety protocols, including 128-bit SSL encryption and MD5 encryption, and it’s Verisign certified. If you’re comfortable storing your payment information with other online retailers, you should be comfortable with Empyr as well. However, for some customers, this may be a dealbreaker.

The second question is whether EvoShare is a better option than some of the alternative cashback services that are out there. This choice will primarily come down to whether you want cash in your own bank account or you’d rather use this “found money” as an easy way to either pay down student loan debt or save for college funding or retirement. If it’s the former, the scales might tilt toward an option such as Rakuten or TopCashback. If you prefer the latter, EvoShare might be the better choice.

At the end of the day, EvoShare is a great way to earn money for activities you’re already doing. As time passes, you can earn money toward your savings by using EvoShare on some (or all) of your purchases.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

John Csiszar
John Csiszar |

John Csiszar is a writer at MagnifyMoney. You can email John here

Advertiser Disclosure

Banking

Switching Banks: How to Close Your Bank Account

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

how to close your bank account sign says closed
iStock

If you’re not getting the most out of your bank, it could be time to get a new one.

While banks might seem similar in what they offer — checking and savings accounts, ATMs and debit cards, for example — the interest rates and account features they offer can vary widely.

If your bank isn’t meeting your needs, you should choose one that will. Here’s what you need to know about how to close a bank account.

How to close a bank account

Step No. 1: Select a new account

Before you close your account, make sure there’s a better option.

Are you hoping to find a bank with an intuitive, easy-to-use mobile app? Maybe you want a higher savings account rate. Perhaps you tend to use a lot of cash and are searching for a bank with ATM access on every corner.

A key component to opening an account is the new bank’s fee structure. Many big banks offer free checking, but have caveats such as maintaining a minimum balance.

You’d be wise to choose a bank that offers free checking with no strings attached. That way, if you suffer a financial pitfall, such as losing your job, you don’t have to worry about getting hit with a fee.

Another thing to think about is overdraft protection. If you make an ATM withdrawal or debit card transaction and there are insufficient funds to cover it, the transaction could still go through, but your bank may charge you a “non-sufficient funds” (NSF) fee.

Conversely, if you don’t opt in and attempt a transaction without this service, your card will most likely be declined. According to a Consumer Financial Protection Bureau (CFPC) analysis, consumers who opt in for this service pay an average of $22 a month in overdraft and NSF charges, while consumers who do not opt in pay an average of $3 a month.

If you’re switching banks because your current one doesn’t offer high savings rates, you might want to consider an online-only bank. Online banks typically feature higher rates than big banks because they have lower overhead, for example, not having brick-and-mortar branches to maintain. Credit unions should also be on your radar, as they often have low fees and high APYs.

Now, you can start shopping for a bank that fits your needs.

Step No. 2: Transfer your money to a new account

So, you now know where you want to open a new account. Transfer your money (well, most of it) to the new account.

How long this takes will depend on your bank. If you use Wells Fargo or Chase, it’s three to five business days.

If you can, try to keep enough money — maybe $200 or so — in your old account to cover any transactions you might have missed. This will safeguard you against “zombie” accounts, which are accounts that get reopened when forgotten pending transactions are processed. This will also help you maintain the minimum balance in your old account if you had that requirement.

Step No. 3: Review and change auto payments and direct deposits

If you previously used direct deposit, make sure to set it up at your new bank. Also, change all your automatic bill payments.

And speaking of automation: Remember to allow all autopay bills and deposits to clear your current account before closing it. If you’re not sure what that includes, go through a year of bank statements. You want to find bills paid through your bank, bills paid via outside companies (such as Netflix and your gym membership) and direct deposits.

Once you’ve identified the automated transactions, go through and cancel them or reroute them to your new bank. It’s worth another reminder to be sure to wait for all transactions to clear.

Step No. 4: Contact the bank to close your account

The process for closing your account will depend on which bank you use. There is one recurring theme, though: You’re probably going to have to either call the bank or visit a branch.

Many big banks don’t allow you to close an account online. For example, if you have an account with Wells Fargo or Chase, you’ll need to submit paperwork online, then call the bank or visit a branch to close your account.

Some of these documents can be quite in-depth. Wells Fargo’s account closure request, for example, is four pages and requires notarization.

The time it takes for an account to close — once all your transactions are clear — can vary, so be sure to check with your bank. At TD Bank, for example, it’ll take two to three business days.

Now is the time that we remind you that this step is a vital one. You might think you can just remove all transactions from an account and leave it open just to avoid the hassle of closing it. That is not a good idea, as some banks and credit unions levy dormant account fees if your account is inactive for a certain period. For example, Santander Bank may charge $16 a month, while Memorial Credit Union charges $2 a month if an account has had no activity for at least 12 months.

Be smart and close the account to avoid this unnecessary charge. After the account is shut, remember to get written documentation of the account closure mailed to you. It’s important to have the closed account documented should any problems arise down the road, such as the zombie accounts we mentioned before.

Step No. 5: Destroy your checks and debit cards

Now that your account is closed, go ahead and destroy all checks and debit cards. Cut up debit cards and use a paper shredder for the checks. Keep bank statements in paper or electronic form for one year after closing the account, then get rid of those, too.

Remember to review any further statements that come to make sure everything is correct.

FAQ: Closing a bank account

Closing your account is not bad as long as you do it properly. Make sure you take into account automatic transactions, minimum balances, bills and more.

Most banks don’t charge a closure fee. However, some do if you’ve only had the account for a short period. If you attempt to close a PNC account within 180 days, you’ll be charged an early termination fee of $25. Meanwhile, BB&T will charge you $25 if you try to close an account within 90 days of opening it. Banks utilize these fees to prevent consumers from trying to take advantage of a sign-up deal and then closing the account when a discount or promotion ends.

Typically, you cannot close a bank account online, but you can close one over the phone. The process for closing a bank account varies by bank.

If you have a joint account, your bank might require you and the other account holder to visit a branch. If it does, be sure to bring a couple forms of identification, such as a driver’s licence and a Social Security card. Online banks will typically require both of you to enter security information to close a joint account.

Once you have completed all the necessary steps and your old account is clear, banks will typically close your account in a few business days. Check with your bank or credit union for its specific timeline.

If you need to close an account because a family member died, the steps you’ll need to take may vary. If you’re a joint member, you’ll typically become the sole holder of the account. If you’re not an owner, you will likely need to provide documentation to close the account, including a death certificate and Social Security number. As always, request confirmation of the account’s closure from the bank.

Any fees mentioned are as of the date of publishing.

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Chris O
Chris O'Shea |

Chris O'Shea is a writer at MagnifyMoney. You can email Chris here