Your Guide on How to Close a Bank Account

Are you looking for a new bank account? Perhaps you have an old account you no longer use, you’re moving to another country, or you’re in search of lower fees or specific perks.

Regardless of your situation, as your banking needs change, it’s important to adjust accordingly.

When closing a bank account, you typically have two options. Account closure can be completed online or in person. The steps required will depend on variables such as the account type and the institution. However, there’s a fairly standard process you can expect. Your bank provider will fill you in concerning any specific details.

Close a Bank Account

How to Close a Bank Account

Closing an Account In-Person

Some prefer heading straight to their financial institution to speak to someone in-person. If you can do so, this can be helpful for the real-time feedback. Bring a government-issued ID and your debit card, just in case.

If you plan on opening a new account the same day, inquire ahead of time what you’ll need to bring. For example, will they need to verify your address via bank statements or utility bills?

If you plan to close a joint bank account, this process typically requires you to physically visit the bank. Both account holders may need to be present.

How to Close a Bank Account Online

Most banks will also allow you to close an account online, as long as your account is in good standing and has a zero balance. However, you may still need to visit the bank branch to verify and provide a physical signature. Speak to a representative to verify how to close a bank account online.

Fees are associated with closing a bank account under certain circumstances. For example, banks may charge a fee if you close an account within a certain window of time after opening it, or if you close an account with a negative balance. Be sure to ask.

Close a Bank Account

After Closing Your Account

Closing an old bank account (or credit union account) is a fairly straightforward process. However, you will need to notify your bank that you’re closing your account. Throughout the process, document everything. Don’t assume an account is closed because a bank employee says it is. The Consumer Financial Protection Bureau recommends getting written confirmation when you close a bank account.

After you close your account, you may want to:

  • Open a new bank account — If you plan to transfer money elsewhere, you need to open a new checking account or savings account before closing your current one. That way, you have somewhere to move your money. The type of account you open will depend on your goals, whether those include fewer fees or greater flexibility.
  • Transfer your money — If you transfer the money before officially closing your account, double check with your bank about a minimum balance. Banks sometimes charge a fee if your account balance is too low before closing.
  • Switch recurring payments and direct deposit info — Do you have any subscriptions that automatically come out of your account each month? Whether your gym membership, household bill payments, car insurance, or streaming service come out automatically, you’ll need to change payment details. Make a list of everything that comes out monthly so that you can address each item, marking off your checklist as you go. Also, if you get paid via direct deposit, you’ll want to address this right away to avoid delayed payments.

Will Closing a Bank Account Affect My Credit?

Whether you’re closing a checking account or savings account, you may be wondering how account closures affect your credit score.

In many cases, a closed account will not affect your credit score, and your credit card will remain in good standing. However, missed payments can hurt your score. If you forget to switch your automatic payment details after closing an account, this might occur. Look carefully at all your automatic monthly payments so you don’t miss anything.

Banks Are Changing

According to a 2019 report by the Federal Reserve, 22% of Americans (63 million) are either underbanked or unbanked. Although many of those who choose the unbanked route are lower-income, this trend influences people at every income level. Fortunately, more banks and financial apps are cropping up every day to help everyone access secure, convenient banking features.

The key is to find the right alternative options for your unique needs.

As outlined in the article, 5 Top Online-Only Banks in the U.S. (and 2 Popular Alternatives), mainstream banks are no longer your only option. Several alternatives are available, including Passbook by Remitly.

Further Reading: Spring Cleaning with Your Finances: 3 Steps for a Fresh Start

About Remitly

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