Switching Banks: How to Close Your Bank Account

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Updated on Friday, October 18, 2019

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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.