How to Close a Bank Account

Closing a bank account may be necessary for many reasons — maybe you want to save on fees or you need an account with a higher interest rate. Whatever the reason for the switch, the process to close an account, from start to finish, is fairly straightforward. Here’s what you need to know.

How to close a checking account

You can close a checking account at any time. These are the steps you’ll take:

1. Open a new checking account. You’ll want to take some time to find the account that works best for you in terms of fees, access to ATMs and digital banking tools. Once you’ve found a good match, contact your new bank to determine what documents you’ll need to open an account, whether you open it online or at a branch.
2. Transfer funds to your account. The next step is to fund your new account by transferring money from your old account. Many banks allow you to do this via wire transfer, but you could also transfer the money by depositing a personal check. You can open some checking accounts without a minimum initial deposit.
3. Update your direct deposit and automatic payment details. At the same time, work on updating your direct deposit details with your employer, as well as switching over any automatic payment information. If you forget to update this information and a payment is late, it could result in added fees and penalties.
4. Inform your bank or credit union. Once you’ve transferred all deposits and payments, contact your old bank and ask about the process for closing your account and any related fees. Many banks will allow you to close your account online, but in some cases, you may have to visit a branch in person or even submit a notarized written request.
5. Request confirmation. After you complete all steps to close your account, ask the bank for written confirmation of account closure. Some banks will notify you by email, and others will send confirmation letters by snail mail.
6. Dispose of account-related items. Carefully dispose of any checks and debit cards that are linked to your closed account by shredding them.

If you have a joint checking account, the process to close your account should be fairly similar. However, in some cases, the bank may require both parties to sign off on closing the account before moving forward.

How to close a savings account

The process for closing a savings account is relatively simple and similar to closing a checking account. What you’ll do:

1. Open a new savings account. Consider interest rates, initial deposit and balance requirements, fees, perks and other key features. To maximize your savings, you may want to open a high-yield savings account.
2. Fund the new account. Typically, you can transfer money to your new savings account via wire transfer or a paper check. You may be able to open an account with no minimum deposit.
3. Contact your bank or credit union. Talk to a representative from your bank or credit union about the process for closing your account and any fees you may incur. Depending on the financial institution, you may need to visit a branch in person or submit a written request.
4. Request written confirmation. After you complete the account closure process, make sure to request written confirmation from your bank or credit union.

How to close a certificate of deposit (CD)

CDs allow you to earn attractive yields by requiring that you keep your funds in the account for a set period of time. As a result, the process of closing a CD once it reaches its maturity date works a bit different from closing a standard checking or savings account. Here’s how to handle it:

1. Verify the maturity date. A CD’s maturity date is the point at which you can withdraw funds from your account without incurring any penalties. It’s a good idea to keep this date in mind, because if you take money out of your account any earlier, you’ll likely need to pay an early withdrawal penalty. This penalty could be a flat fee or a number of months’ worth of interest earned.
2. Wait for your grace period. Once a CD matures, you’ll have a grace period — usually about 10 days — to decide what you want to do with the funds. If you don’t take action during this time, your CD may automatically renew.
3. Contact your bank or credit union. Call your bank or credit union during your grace period. Ask about the specific process for closing your CD, as well as any fees you may need to pay.
4. Transfer the funds. Decide where you want the funds in your CD to go. Do you want to roll them into a new CD or transfer them into your checking or savings account? Work with your bank or credit union to facilitate the transfer.

How to close a money market account

Money market accounts (MMAs) are interest-earning accounts that typically offer higher rates than traditional checking or savings accounts. Some also provide check and debit card access but may limit certain monthly transactions.

Closing a money market account is similar to closing a checking account:

1. Decide where the funds should go. Take some time to think about whether you’d like to open a new money market account, or simply have the funds transferred into an existing checking or savings account.
2. Update direct deposit and automatic payment information. You’ll need to redirect any payments or deposits.
3. Transfer the money. Move the funds into the account of your choosing.
4. Contact your previous financial institution. Ask for specifics about closing the account, including any applicable fees. If necessary, ask a representative to facilitate the account closure for you.
5. Request confirmation of account closure. Ask your bank or credit union to send you written confirmation that the account has officially been closed.
6. Destroy account-related items. If your money market account came with a debit card or checks, make sure to shred those products.

Common reasons to close a bank account

Now that you know how to close a bank account, here are some common reasons why people decide to close their accounts in the first place:

• You’re moving soon: Many banks don’t operate nationwide. If you’re moving somewhere where your current bank doesn’t provide branch or ATM access, it likely makes sense to switch to a bank that services your new location.
• You dislike the bank’s service or products: If your current bank isn’t offering you what you need in terms of available products or quality of customer service, it might be smart to look elsewhere.
• You’ve found better rates at other banks: The potential to earn a high yield is one of the main reasons why people switch banks. If you qualify for better rates at a different financial institution, consider moving your money there.
• You can’t afford the fees: Some banks charge high account fees. If your account is costing you too much money each month, it’s likely time to look into a fee-free account instead.
• You’ve been a victim of identity theft: If your identity has been stolen, it may be necessary to open a new account for safety reasons.

Frequently asked questions

Is there a fee for closing a bank account?

Typically, there isn’t a fee for closing a bank account unless you close it shortly after you’ve opened the account. Check with your bank or credit union to verify whether you’ll be charged before you close the account.

Can the bank close my account?

Banks typically reserve the right to close accounts for any reason. However, it’s commonly done if you’ve written a series of bad checks; if your account has been inactive for a number of years; or if you regularly don’t keep enough money in your account to cover its fees.

Does closing a bank account hurt your credit?

Closing a deposit account generally doesn’t hurt your credit score. That said, there are a few actions related to closing your account, such as forgetting to update your automatic payment information, that may harm your credit score.