How To Close A Bank Account

Any number of reasons might prompt you to close a bank account, but there are a few important steps to take before you sever ties with your financial institution. The steps to close a bank account may include setting up your direct deposit, recurring transfers and scheduled payments with another account and following your bank’s specific procedure for closing an account.

Closing a bank account checklist:

1. Set up recurring transfers and direct deposits before closing your account. Once you’ve listed all your automatic transfers and direct deposits, make sure to redirect them to your new account. This way, you won’t overdraw the old account or hold up any payments.
2. Check for any pending payments on the old account. Don’t forget payments on goods and services that haven’t yet been completed. You’ll need to confirm there are no pending payments before closing the account.
3. Update payroll information with your new account. Reach out to your payroll provider or human resources department with the updated bank information to ensure your paycheck is deposited into the new account. You’ll also need to update account information if you receive benefits, such as Social Security payments or unemployment insurance. This can be done at the respective agency’s website.
4. Close the old account. Once you’re certain there’s no more activity on the old account, you may close it online, over the phone or at a local branch.
5. Ask for written confirmation of the account closure. If available, the document will serve as proof that the account was closed so that you’re not held liable for any fees that may occur if the bank reopens it.

Can you close a bank account online?

If you’re not near a branch location, or would rather avoid a trip to the bank, some banks do allow their customers to close their accounts online. The option to close a bank account online will likely be found in the online banking portal after you log in to your account. If not, you may need to use the bank’s online messaging system to speak with an agent.

In some cases, customers may close their account by printing out a form from the bank’s website, filling it out and sending it to the bank by mail. That way, customers can still close their accounts even if they aren’t near any branches.

Closing a bank account for someone who has died

What happens to a bank account after the account owner has died depends on several factors, including whether it’s a joint account and whether a beneficiary is named. Generally, after the death of a sole account owner, the financial institution will close the account and release funds to either a beneficiary or an executor — the person designated to carry out the terms of the deceased’s will. But there are some important caveats to consider that could affect the process.

Closing a bank account FAQs

• Is there a fee to close a bank account?
  

  There could be a fee to close an account. For instance, Regions Bank has an early account closing fee of $25 if you close your account within 180 days.

  Ideally, check with your bank before you open your account to see if it charges a fee for closing the account.

• What documents do you need to close a bank account?
  

  The documents you need to close a bank account will vary by bank. You may need a government-issued photo ID, such as a valid driver’s license or a U.S. Passport to close a bank account. Having a secondary ID, such as a debit or ATM card can also be helpful but it might not be necessary. Call your bank ahead of time to see what requirements it has for closing an account.

• Does closing a bank account negatively impact your credit score?
  

  Closing a bank account shouldn’t impact your credit score. This is because you likely won’t find a checking account, savings account or money market account on your credit report. On the other hand, closing a credit card can impact your credit score in some circumstances.

Bottom line

Getting confirmation of an account’s closure is the best way to ensure that no automatic transfers go through to the old account and result in unexpected fees. Also, review the terms and conditions of your bank account. If you were offered a cash bonus to open the account you’re terminating, check the terms of the deal. If you close the account early, that money — which sometimes amounts to hundreds of dollars — could be forfeited.