Banking

How To Close A Bank Account – Forbes Advisor

· How to Close a Bank Account · 1. Open a New Account · 2. Switch Your Existing Scheduled Payments and Deposits · 3. Transfer Your Money · 4. Contact 
38

As your banking needs change, you may find yourself in a situation where you need to close a bank account. It could be that you’re moving and need to find a new bank or want to switch banks to take advantage of better interest rates. Whatever the reason, you’ll likely want to close your old bank account.

Closing a bank account isn’t complicated, but there are actions you can take to ensure the account is closed correctly—and all of your money accounted for. Follow these steps when closing a bank account.

Reasons for Closing a Bank Account

You don’t need a reason to close a bank account. However, there are numerous reasons you might want to. Here are some of the more common reasons to move on from your current account:

  • You’re moving to a new city or state
  • You can get better interest rates
  • You’re switching to an online bank
  • You qualify for a bank bonus offer
  • You want to escape poor customer service
  • You’re being charged expensive fees
  • You can get better features and services elsewhere
  • You’re opening a joint account
  • You’re consolidating your bank accounts
  • You’re switching from a child account to an adult account

Whatever the reason, consider the decision carefully to ensure you’re making the right moves for your financial situation.

How to Close a Bank Account

Closing a bank account involves more than contacting your bank. You’ll want to do some advance work to ensure a successful transition. The specifics for closing an account vary by bank and credit union. Be sure to check your banking institution for special requirements. Generally, follow the steps below.

1. Open a New Account

The first thing you need to do is open a new bank account. Having an account in place ensures you have a place to transfer direct deposits and payments or debits.

Many factors go into choosing a new bank, including savings rates, fees and account offerings. Whether you decide on a traditional brick-and-mortar bank or an online bank, ensure you’ve established your new account before moving forward.

2. Switch Your Existing Scheduled Payments and Deposits

If you have any direct deposits or automatic payments set up, move them to the new account. Check with your employer regarding any forms you need to fill out for direct deposit so your paycheck can be rerouted to the new account.

Do yourself a favor and make a list of your monthly recurring payments. This could include:

  • Car payments
  • Mortgage payments
  • Insurance payments
  • Student or personal loans
  • Credit card payments
  • Gym memberships
  • Streaming services
  • Utilities and other household bills

Read more: What Is Private Banking? Here&039s How It Works | Bankrate

Having a list helps ensure you’ve canceled all of the payments attached to your old account, but you’ll also be prepared when you need to set them up for your new bank account.

3. Transfer Your Money

Before you move money out of your account, let outstanding transactions clear. Failure to do so could result in having to pay overdraft fees. If you still have money in the account after everything clears, withdraw the money or transfer it to your new account.

If your bank account has a minimum balance requirement, only transfer money out of the account when you’re ready to close it so that you’re not charged a monthly maintenance fee.

4. Contact Your Bank

Cancel your bank account. Many financial institutions allow you to do this online, but it could require a phone call to customer service or a visit to a local bank branch. Some banks and credit unions may require you to fill out an account closure request form or submit a written request. Follow your bank’s guidance on the proper contact method to start the closure process.

The bank will check your account to ensure it’s in good standing and that you’ve resolved any outstanding issues before it marks the account as closed. If there are any remaining funds in the account, you should be able to request a transfer to your new account or receive a check by mail.

5. If Required, Send a Letter to Close Your Bank Account

You can write a letter to your bank to close an account. To do so, you can use the template below or a similar format.

Date

To whom it may concern,

Please close the following bank account(s):

  • List account name and account number for each closing request

Please send a check for any remaining funds in those accounts to the address below. Please follow up with written confirmation to verify the previously mentioned accounts have been closed.

Read more: 25 Places Where You Can Cash a Cashier&039s Check (in 2022) – MoneyPantry

Please contact me if you have any questions.

Thank you,

Signature

Full name (Printed)

Mailing address

Phone number

6. Get Written Confirmation

Don’t assume that the account is closed. The Consumer Financial Protection Bureau recommends getting written confirmation when you close a bank account. This protects you if the bank doesn’t follow through or some issue arises.

How to Close Certain Types of Bank Accounts

Not all account closures are handled the same. Other scenarios may pop up that require extra steps to close a bank account. Here’s a look at a few examples that might require extra attention.

Joint Account

Your bank may require an account closure request with both account holders’ signatures if you’re closing a joint account. Many banks, however, only require one account holder’s authorization. Canceling a joint account online could require both parties to request an account closure.

Child’s Account

Read more: EmigrantDirect Review – Forbes Advisor

Some bank accounts are automatically converted into regular accounts when a child turns 18. If you’re of your state’s legal age to take complete control of your custodial account, you can close the account the same as any other bank account.

Inactive Account

If your account has been marked “Inactive,” you’ll need to reactivate it before it can be closed by the bank. Contact your bank’s customer service to reactivate your bank account. There might also be an option to do this through your online or mobile banking.

Overdrawn Account

Having an overdrawn account could prevent you from closing an account. You’ll need to get your account to a zero balance or higher before the bank will process your closure request.

Deceased Person’s Account

Closing the bank account of a loved one who has passed away can be more complicated than closing other accounts. How the account is handled depends mainly on how the deceased structured their finances, including whether they listed a beneficiary or had a will. Requirements and documentation may depend on state law. Your best bet is to seek legal counsel before proceeding.

Can You Close a Bank Account Online?

Many banks allow you to close an account online. It’s especially common among online banks. Some enable you to close an account via online messaging or email. Others offer chat features that let you close an account through customer support.

Contact your bank to figure out options. Ensure your account is in good standing and has a zero balance before you try to close it.

How Much Does It Cost to Close a Bank Account?

Typically, it doesn’t cost anything to close a checking, savings or money market account. Time-deposit accounts, such as certificates of deposit (CDs), may issue a penalty. Most banks and credit unions charge an early withdrawal penalty if you close a CD account before its maturity date.

How Long Does It Take to Close a Bank Account?

Closing a bank account can be a quick process, especially if you’ve already transferred funds from the account and accounted for any lingering transactions. If you’ve already withdrawn or transferred funds to another account, the closing process may only take a few minutes.

Tips When Closing a Bank Account

If you’re planning on closing a bank account soon, here are a few extra tips that will benefit you in the long run:

  • Open a new account first. Opening a new account ahead of time gives you a chance to transfer funds out of the old account. It also gives you a place to make transactions during the transition.
  • Document everything. Closing a bank account should be smooth. But keep records of communication with bank staff and save communication from your bank.
  • Destroy the remnants of your old account. Destroy any checkbooks or debit cards tied to your old account. This keeps them from getting lost, stolen or used accidentally.

Bottom Line

If you need to close a bank account for any reason, you can speed up the process by following the steps above. Keep records of all transactions and correspondence with your bank to ensure that your account has been closed properly.

Frequently Asked Questions (FAQs)

0 ( 0 voted )

150 Charles

https://150charles.com
A remarkable site overlooking the expanse of the waterfront, 150 Charles Street is sited between the activity on the Hudson River and the history of the West Village

See more