How to Close a Bank Account: A Step-by-Step Guide

Sometimes you have a bank account you don’t want or need anymore. Instead of just taking your money out of it and conducting transactions with other accounts, it's recommended to go through the bank account closure process.

Learn how to close a bank account effectively to avoid fees and smoothly transition to your new account.

5 Steps for Closing a Bank Account

Before you reach out to your bank about closing your account, there are a few steps you should take, starting with finding a new bank.

1. Find a New Bank

If you’re planning to open a new account after closing your old one, you need to choose your new financial institution. Alternatively, you may opt to open a different account at your current bank.

Either way, you have to decide what type of account you want to open and where. Research different banks and the benefits they offer for saving money. Consider whether you’d prefer a bank with a local branch or a digital bank instead. There are lots of different options, so take your time finding the right bank for your needs.

Make sure the bank you choose has a strong reputation for security and customer service. With banks backed by the Federal Deposit Insurance Corporation (FDIC), your deposits are insured up to $250,000, which can offer great peace of mind.

2. Switch the Scheduled Payments, Deposits and Withdrawals

You may have a number of automatic payments or deposits tied to your old bank account. Before you can close it, you need to switch those transactions to a new account.

For example, if you have direct deposit set up for your paycheck, contact your employer to switch those payments to your new bank account. Read through your previous statements to find recurring payments. Then contact those vendors to provide your new account information instead.

3. Transfer Money to the New Account

Once you’re sure no new transactions will hit your old account, you can move your remaining balance.

One option is to withdraw your funds in cash and make a cash deposit to the new account. Or you can request an electronic transfer.

Make a copy of any account statements or additional information to access it even once the account is closed. While you can figure out how to get statements from a closed bank account, it’s easier to just get them ahead of time.

4. Contact the Bank To Cancel the Account

Finally, it’s time to contact your bank and ask them to close the account. You can complete the closure by phone or online with most banks. Follow your financial institution’s steps for how to close a bank account online or by phone. You may need to fill out a form or possibly a notarized request.

5. Ask the Bank To Confirm Closure

It’s always a good idea to double-check important details like your bank account closure. After giving the bank time to process the request, reach back out to confirm that your account is closed. Get written confirmation so there’s no question.

How Closing a Bank Account Can Affect Your Credit Score

Sometimes people worry that closing any financial accounts, including a bank account, will hurt their credit scores. The good news is that closing a bank account typically won’t impact your credit score at all.

Bank accounts don’t appear on your credit report. Instead, your credit score is all about your behavior of borrowing money and repaying loans. Because regular checking and savings accounts are not loans, they don’t impact your score.

The only time closing a bank account may hurt your credit score is if you do so while your account has a negative balance. In that case, you owe the bank money. If you don’t pay back the amount you owe, the bank could send your account to a collection agency. The agency might then report your debt to the credit bureaus, putting it on your credit report. You may notice your credit score go down as a result.

FAQs: Main Questions About Closing a Bank Account

Are there penalties for closing a bank account early?

Typically, there are no fees for closing out a checking or savings account. The only time you might have to pay early account closure fees is if you close your account soon after opening it. Check your account details to see if any of these fees apply.

What should I do if I have outstanding checks?

If you still have outstanding checks, you should wait for them to clear before closing your account. You can reach out to the people or vendors you paid with these checks to ask them to deposit the money as soon as possible.

Closing a bank account while you still have outstanding checks will cause them to bounce, and your bank may charge you fees.

How long does it take to close a bank account?

If there are no outstanding issues with your account, the bank should close it soon after you put in the request — possibly even the same day. State laws typically require financial institutions to close banking accounts within a reasonable time frame. However, closing your account may take longer if you have outstanding fees or transactions.

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