Closing a bank or credit union account is not complicated if you follow the correct procedure. However, if you fail to follow the proper procedure, you may incur specific fees or delay the process altogether. Below is a step-by-step guide on closing your bank account, but keep in mind the exact procedure varies by bank.
Open a New Account
Opening a new account before closing your old account is essential since you need an account to transfer your payments and funds. After finding a new bank or credit union and opening an account, check if they offer a switch kit.
A switch kit has checklists and forms notifying depositors and billers that you switched bank accounts. This kit makes switching bank accounts more manageable, faster and convenient.
Switch Your Payment Details
Before you close your account, it is essential to switch your payment details. You'll need to update automatic and recurring payments such as student loan payments, television streaming services and more by setting them up on your new bank account. Make sure to switch payments set up with your bank or credit union's online banking system and accounts you have set up to withdraw funds as payments regularly.
Alternatively, you can cancel automatic and recurring payments from your old account then restart them on the new one. Switching automatic and regular payments will help prevent bank overdrafts or duplicate payments. In addition, canceling automatic payments prevents your old bank from reopening a closed account if you forgot to make the payment on time.
Switching payment details also includes updating your direct deposit settings.
You will need to inform your company's payroll department or anywhere else your money comes from that you've changed bank accounts. Additionally, remember to provide them with your new account's routing and account numbers to prevent them from sending your paycheck to your old bank account.
Transfer Your Money
After updating your payment details and direct deposit settings, you'll need to transfer your money to the new account. Before doing this, confirm with your new bank whether any transfer limits prevent you from transferring your entire balance to the new account. If there are no limits to the transferable amount, then go ahead and move your whole balance to the new account.
On the other hand, if there are any transfer limits, you'll need to transfer your money in bits over a given period to avoid violating the transfer limits. Also, keep in mind that some banks have a minimum balance requirement. As a result, you may not be able to transfer your whole balance to the new account. In that case, leave the minimum balance in the old account and then transfer the rest to your new account.
Suppose you have automated and recurring payments on the account you wish to close; ensure you cancel the payments before transferring all your money to the new account. Alternatively, leave some extra cash in the old account to cover any unexpected charges and avoid overdraft fees.
Close the Bank Account
Closing a bank account may take weeks or months. It depends on the time it takes to update automatic and recurring payments or transfer funds to your new account.
The most straightforward thing to do when you want to close your bank account is to go to your nearest branch and talk to a representative. You can ask them any questions about closing an account. They should be able to provide further assistance with this process.
If it's not possible to head to the nearest branch, consider closing your account online if your bank or credit union provides that option. If it doesn't, you'll need to contact customer service to request an account closure.
Note that the process of closing an account is different for each bank or credit union.
After requesting account closure, you'll need to obtain written confirmation from them as proof. You may need the written confirmation for future reference or to transact elsewhere. A written confirmation comes in handy if the bank or credit union reopens your old account because you forgot to make or cancel an automatic payment.
Lastly, remember to destroy checks and debit cards associated with your old account to prevent accidental or fraudulent use.
To close your account without any hurdles, you need to follow the guidelines set by your bank. You'll also need to set up direct paycheck deposits and switch automatic payments from your old account to the new one to avoid overdrafts or missing a bill. Most importantly, remember to request a written confirmation from your bank as proof your account is closed permanently.