Closing a bank account is a straightforward process, but it can take an unexpectedly long time if you aren’t prepared. Depending on a few different factors, the process can take a day, a week, or even a few months.
In most cases, closing a bank account can be finalized in one or two days. Causes of delay could be dependent on the amount of funds in your account and how quickly you deactivate or reroute direct deposits and online bill payments to a new account.
Closing a bank account is a great opportunity to take a look at your budget with a fresh perspective. Read below for more tips for closing your bank account.
1) Transfer Money to Another Bank Account or Open a New Account
If you are transferring funds to a new account at a different bank, be sure to follow the right protocol to avoid any mishaps. Typically, transferring money between two accounts is free, but be sure to confirm each bank’s policies. Sometimes there is a limit on how much money you can transfer at one time or how many transfers you can make a month, so plan accordingly.
2) Change All Recurring Payments to the New Bank Account
Switching your payments over to a different account can usually be completed easily online. It’s a good idea to review your last six months of expenses to make sure you don’t miss transferring any recurring payments. Be sure to update or delete your saved banking information with all of your favorite websites to ensure you don’t accidentally charge the wrong account. Don’t forget to contact your company’s payroll team to update your direct deposit information, and plan in advance in case there are any errors.
3) Confirm That All Pending Payments Have Cleared
Double check that automatic transactions including checks and electronic debits are terminated before moving forward with closing your account. Be sure you switched your direct deposit to the new or alternate account of your choice.
4) Notify Your Former Bank
Call your bank to inform them that you want to officially close the bank account. Allow plenty of time for your previous bank to process the change processed.
5) Complete, Sign, and Submit the Account Closing Form
Keep in mind that you might need to get your closing form notarized. There are usually notaries available at the branch locations of banks and credit unions.
6) Destroy Old Checks and Debit Card(s)
Be sure to securely dispose of any old checkbooks and debit cards with your previous bank account. Not only will this prevent any confusion, but also it will protect your personal information.
7) Make a Document to Record Details of Each Step of the Process
This includes dates and times that you spoke to bank representatives. You never know when you might need this information for future reference. Also, make sure to get confirmation of the account’s closure in writing.
3 Common Reasons to Close a Bank Account
If you’re wondering whether or not it’s worth it to close a bank account, check out the most common reasons people make this decision.
1) How to Close a Bank Account You Had as a Child
If you still have a joint account that your parents helped you open when you were a child, it might be time to close it. You have to physically go to the bank with your parent who is the co-owner of the account. Both you and your parent will complete and sign an account closure form to officially terminate the bank account.
2) How to Close a Joint Bank Account
You must visit a physical bank location in-person with the co-owner of your joint account to terminate it. In the same way that you closed your childhood joint account, both owners of a joint account must agree to sign the account closure form. In the case that your account co-owner doesn’t agree with your decision and won’t cooperate, you might need to get a lawyer involved.
3) How to Close a Bank Account of Someone Who is Deceased
Sometimes the funds are automatically transferred to a beneficiary’s account, but you may have to close the deceased’s bank account yourself and transfer it to your account of choice. If you are a family member and there isn’t a will, you must contact the banks involved and work with them to receive access to the appropriate checking and saving accounts. It might make more sense to retitle the deceased’s bank accounts rather than closing the old ones.
Can You Close a Bank Account Online?
While many larger banks have begun to allow you to close your accounts online, many others still require you visit the bank in person to verify closure. There is a chance you might need a request in writing to close your account, along with your signature. This is to verify the process and prevent fraud. On the other hand, if you don’t close your account, you could get charged a “dormant account” fee after a certain time period.
The only way to know if your particular bank allows online account closure is by contacting them directly. Usually calling and speaking with a representative is the best confirmation. If you think ahead, it’s usually possible to avoid any fees when switching over to a new bank. However, be mindful that some fees involved are unavoidable. Below, we’ve outlined whether or not you can close your account online at eight of the most popular banks in America.
to Close Account
|Can You Close
Your Account Online?
|Bank of America||1-800-432-1000||No|
Does Closing a Bank Account Affect My Credit?
You might wonder how closing a checking or savings account could influence your credit score. If you’re smart about keeping the right amount of money in your checking account at all times, you don’t need to worry about account closure affecting your credit. Most of the time, customary account closures or funds transfers don’t help or hurt your credit.
However, if you don’t have overdraft protection, your account has a negative balance, and you close the account without following up, banks, lenders, and creditors will notice. If you’re experiencing some financial difficulties, don’t wait to address overdrafts and the ensuing fees. To protect your credit, you must resolve outstanding payments right away.
If you’re thinking that it’s not worth it to close your inactive bank account, think again. By not closing your account, you could get charged a “dormant account” fee after a certain time period. Whether you’re at the start of your financial journey or you’re close to retirement, you might need a refresher on how to close a bank account.
The process of closing an account is a great chance to reflect on the state of your finances through a money audit. Maybe you’re already making progress with your goals, or you might realize you need to start budgeting and bill tracking as soon as possible. With the right financial tools like Mint’s budgeting app, you’ll be able to set yourself up for long-term financial health and success.
Written by Mint.com.
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