How to close a bank account in 6 steps

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At one point or another, you may have to close a bank account. Maybe you’re moving to a new city, or perhaps you're switching to a new bank that offers better interest rates. Whatever the reason, closing your old account the right way can avoid problems.

Closing an account may seem as easy as calling the bank. Still, there are a few important things to keep in mind, including hanging onto necessary paperwork that you gather throughout the process and considering a new bank account that best suits your lifestyle.

Why would you want to close a bank account?

There are a few common reasons why people decide to close a bank account:

• You’re moving: If you’re moving out of state or a less convenient area, it can be easier to close your old account.
• You want to avoid fees or charges: Depending on the bank, you could earn hundreds of dollars more in interest by switching to a high-yield savings account.
• You want better interest rates: Depending on the account, you could earn hundreds (or even thousands) more in interest by switching to a high-yield savings account. 
• You want to consolidate your finances: Some people close accounts to move all banking to a new joint account when they get married or as a way to simplify.
• You want better customer service: Poor customer service or difficulty resolving banking issues can push people to take their money elsewhere.

No matter the reason, closing a bank account is a pretty straightforward process. Here are six steps on how to close your bank account.

1. Find a new bank

Before closing your bank account, it’s essential to open a new one if you don’t already have one. You want to ensure you have an alternative place to receive direct deposits and pay bills. Having overlaps between your old and new accounts during the transition can help avoid missed transactions.

To find the right next bank, reflect on what you want to close your current account and what you’re looking for. Here are some things to consider:

• Account features: Research the different account types offered by potential banks. Choose features that align with your goals — whether it's earning interest or minimizing fees.
• Mobile banking capabilities: Evaluate the user-friendliness of the bank's online platform and mobile app. Features like mobile check deposit, bill pay, and real-time transaction tracking can contribute to a seamless banking experience that complements how you manage money.
• Fees: You’ll also want to ensure your banking experience is cost-effective. Common bank fees include ATM fees, overdraft fees, and monthly maintenance fees. Some banks offer free checking and savings accounts or offer ways to waive certain fees.

2. Open a new bank account

Once you’ve found the right bank, you should open a new account. To open a bank account, you must provide certain documents for verification. This includes:

• Government-issued ID (such as a driver's license or passport)
• Proof of address (such as a utility bill or lease agreement)
• Your Social Security number
• Your email address
• Phone number

Depending on the bank, you can visit a local branch or apply online to open a new account. Once your application is approved, you must deposit funds into your new account. This can often be done via cash deposit, check, or an electronic transfer from another account. The initial deposit required will vary depending on the bank and the type of account you’re opening.

After you've opened and funded your account, the bank will provide your account number and routing number (for transfers). This information is crucial for updating your payments and conducting transactions.

3. Adjust automatic payments and deposits

Before moving everything over to the new account, take some time to prepare your old account for closure. Identify any direct deposits, automatic bill payments, or recurring transfers associated with your current account.

Generally, there aren't any fees associated with closing a bank account unless you close it shortly after opening it.

Verify that all checks initiated from your account have cleared and there are no leftover pending transactions. That way, you establish a clean slate, lowering the risk of discrepancies between accounts and making the closure easier.

If you have pending transactions, work on settling them as soon as possible. Move any automatic payments over to the new account as a proactive measure. Double-checking these steps ensures a smooth closure and prevents interruptions to services.

4. Update accounts with new bank information

Once your new account is ready, the next step is to notify anyone affiliated with your account about the change. This includes automatic deposits, any direct paycheck deposits from clients or employers, and automatic withdrawals to retirement or savings accounts.

You should also update services that rely on the account, including subscriptions, bills, and other recurring payments.

If your friends or family regularly send you money, tell them about your new account details.

This may require removing linked accounts and re-connecting them to your new account, including:

• Savings accounts
• Money market accounts
• CDs
• Retirement accounts
• Credit cards

By keeping everyone informed, you prevent potential payment or service interruptions.

5. Request an account closure

Now that you've moved everything to your new account, you can start the closure process.

The process varies between banks but often involves visiting a local branch or calling customer service. You’ll likely need to fill out a request form or give verbal confirmation. Your old bank may want to review:

• Why you want to close the account
• Any pending transactions or issues
• What to do with any remaining balance
• The mailing address for your final statement

Remember that some banks require proof of ID or other information to close the account. Not following the bank's instructions could delay closing your account.

Ask the bank for written confirmation that your account has been closed. In case of any account issues, it’s best to keep copies of these documents as evidence of the account closure.

6. Handle any outstanding charges

After confirming your account closure, keep reviewing paper and online statements for the next few months. Watch carefully for unexpected reopen fees, residual automatic withdrawals, or any errors where funds were not fully disbursed to you.

Even with your best efforts, an automatic bill payment could slip through right after the bank closes your account. These requests then get rejected, leading to late fees or disrupted services.

Double check a week before the closure that every automated transaction set to pull from the closing account is canceled. Doing so avoids headaches later.

The bottom line

Before closing your bank account, it’s important to take some time to find a new bank that works for you. You should also settle any outstanding fees and verify cleared transactions. Then, you can request an account closure.

With the right preparation, closing a bank account can be simple. Just allocate enough time to notify all related parties, settle your balance, and tie up financial loose ends. Being meticulous about addressing pending issues lets the process go off without a hitch, so you can easily move on from old accounts. 

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