Small and large banks allow customers to open and close accounts regularly; however, there are many hidden procedures in the fine print. The challenge with closing bank accounts these days is that so many deposit and withdrawal services are automated. You must take prepare your bank account carefully in order to close it successfully and avoid potential disruptions in your finances.
EditSteps
EditPreparing to Close a Bank Account
- Open a bank account at a new location, if you are planning to switch banks. Direct payments, direct deposits and bill pay should be fully functioning at another location to avoid extra debts. [1]
- Ask your employers to change the direct debit to your new account. Ask for the bank account and routing number at your new bank. Request a change of Electronic Funds Transfer (EFT) by filling out a form with all employers from the last year.
- If you receive occasionally payments by EFT from an employer, you should play it safe and ask them to update your account. A new deposit into a closed account requires some banks to reopen your old account. [2]
- Change the EFT account on your PayPal account, or other virtual wallets, if you use them frequently.
- Change automatic withdrawals to your new account. Health insurance, rent and utilities are frequently sent by EFT. If you fail to switch the account, your bank account may be reopened and you will owe overdraw fees.
- Review your bank statements for the last year to determine what automatic payments are deducted from your account.
- Call your bank, or stop in a location, and ask to remove any revolving bank services from the account. Failure to stop these services could also result in overdraw fees, even after you have closed your account.
- The terms and conditions of identity theft insurance, automatic transfer to an IRA or other services may require that you cancel each product individually.
- Don’t close an account that you opened within the last 90 days. Many banks charge a fee of $25 to $50 to close an account that has been open for 3 months or less.
- Wait approximately 30 to 45 days for all new electronic deposits and withdrawals to switch to your new account. Each organization that uses EFT may have a processing wait time of 30 days.
- If you are closing a certificate of deposit (CD) or money market account, you may be charged a fee to remove your money and close the account within 6 months to 5 years. These maturity dates require a commitment, or you may lose the interest you have accrued in addition to facing a fee. [3]
EditRemoving Funds
- Check the balance on the account you want to close. You should know exactly how much is in your account before you start the process. Print a bank statement from your online account.
- Confirm that you are able to transfer funds. The Federal Reserve Board does not allow you to transfer money from your savings or money market account more than 6 times per month. Your bank may have a transfer or withdrawal limit on certain types of accounts.
- Call the customer number on the back of your ATM card to check on restrictions. You can also search for your bank’s customer service number online.
- Transfer the money from the existing account to another account in the same bank. You will avoid fees if you do an online automatic transfer.
- Opt to transfer the money to a different bank. You will need to go into a bank location and provide the account number, bank number and routing number. You will usually be charged a percentage of the amount transferred by your bank.
- Choose to ask your bank to issue a check to you. Call the customer service number or go to a bank location. Ask to receive a check for the balance of your account at your home address.
- Many banks only issue balance checks with casher’s checks. If this is the case, there may be a charge associated with issuing the check, such as $25. [4]
- Also, confirm that you have cancelled all bank services associated with that account at this time.
EditClosing the Account
- Stay on the line, or ask the bank teller, to close your account. After there are no funds remaining, you can close the account. You will need the approval of all the account holders to do this, so ask anyone else listed on the account to go to a branch location with you or stay nearby for approval by phone.
- If you are using Wells Fargo, you can close via email as well as by phone or in person. You should go to wellsfargo.com and sign on to your online banking account. Click on the “Contact Us” page and submit a request to close your account. You should ensure that no funds remain, since an email will not allow you to issue a check for the balance, just close your account. [5]
- Bank of America says you must close your account by mail. Send a letter explaining how you would like to receive remaining funds. Make sure all account holders sign the request. Send it to “Bank of America, FL1-300-01-29, PO Box 25118, Tampa FL 33622-5118.” [6]
- Ask for a letter that states you have closed your account. This should be sent by mail to your home address. [7]
- Call or go into a location if you do not receive your letter and check within 5 to 10 business days. If these don’t arrive, chances are there is a problem with your account and it has remained open.
- Deposit the check into your new bank account. If you opted for a direct transfer, check your new account to confirm your funds have been deposited.
- Watch both your accounts for the next 30 days. Make sure your EFT, bill pay and other credits and debits are going in and out of the new account. Simple human error may delay your account being closed properly.
EditWarnings
- Beware that each bank requires different forms of account closure. Call your bank’s customer service number to inquire if you can close online, by mail, by phone or in-person.
EditThings You'll Need
- EFT forms
- Bank statement
- Account closure letter
- Cashier’s check
EditSources and Citations
Cite error: <ref> tags exist, but no <references/> tag was found