How To Close A Bank Account

July 15, 2019 by  
Filed under Foreclosure

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Are you getting ready to close your old bank account and transfer everything over to your new account? Are you worried you will forget something important while transitioning? Learning how to close a bank account and successfully changing to your new bank is not as complicated as you may think. However, before you make the switch, it is important to know how to deal with automatic payments, how you should handle your bank balance and what you should do with your old debit cards and checks.

How To Deal With Automatic Payments

LET YOUR CHARGES CLEAR

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Before you proceed with how to close a bank account, you first need to let any outstanding charges clear. Depending on your particular bank, this could take around 2 weeks or more. An easy way to see what the status of your remaining charges are is to look at your balance online and review your transaction history. This will give you a good idea of your bank account’s running balance and let you know which charges are remaining.

CANCEL THOSE OLD AUTOMATIC PAYMENTS

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Another important step regarding how to close a bank account is to cancel any automatic payments you have set up. You do not want to find yourself in a position where an automatic payment is coming out of your old account, resulting in an overdraft or invalid payment if it is completely closed. Any automatic payments for things, such as music streaming services, TV streaming services, credit card providers, gym memberships, student loans or anything else you may have set up, need to be canceled before you can switch them over to your new account.

It may take time to review all the companies you have automatic payments set up with, but it is well worth the effort and will save you plenty of undue stress down the line. If you are unsure if you have missed anything, look at your previous bank statements to see what automatic payments are coming out every month and ensure you make the change for all those providers.

UPDATE YOUR PAYMENT SYSTEM

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Now, the next step in how to close a bank account is to update your payment system. Once you have determined which providers you have automatic payments with and have canceled those monthly withdrawals with your old bank account, you need to transfer everything over to your new bank account.

Be sure to write when each payment is due so you can set all your new automatic payments to correlate with the proper time frame. Canceling your old automatic payments before setting up your new system will accomplish a few key things. First, you will not have to worry about making multiple payments to the same provider in the event that you missed one. You will also make sure you do not overdraw money from your low or empty old account due to a mistaken payment schedule.

REMEMBER TO CHANGE YOUR DIRECT DEPOSITS

Another important automatic payment to change when learning how to close a bank account is your direct deposit payout. If you receive direct deposits bi-weekly, monthly or at any other time, you need to speak with the payroll department for your company to keep them updated regarding your new account.

To change your system for direct deposits, you must provide the payroll representatives with the routing and account numbers for your new bank. Plan and give this information to your company before you close out your old account. It takes a bit for direct deposit payments to be switched over.

As such, it is important to make sure everything runs smoothly and you have enough time to check both your old and new accounts to see that the changes have been made—correctly. Additionally, if you have alternative income sources, like investment accounts, brokerage accounts or anything similar, make sure you update your account information so the money is directed to the right place.

Transfer Or Withdraw Your Balance

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ALWAYS TRANSFER YOUR BALANCE

Once all your old charges have cleared, you have changed your old automatic payments and set up a schedule for the new ones, it is time to transfer your remaining balance to your new bank account. Look at the terms and conditions of your accounts to make sure there are not any transfer limits. Depending on how much money you have in the old account, you may have to make the transfer in increments rather than all at the same time.

If your old bank account has a minimum balance required, leave enough in there for the time being. You can always take that lesser amount out in cash later, but you do not want to go below that minimum balance until the end of the process.

If you still have some automatic payments or charges outstanding that will not move over to your new account until the following month, make sure there is enough money in your account to cover them. It is better to have a little additional money in the old account to cover any last-minute expenses rather than deal with unwanted overdraft costs.

HOW TO CLOSE A BANK ACCOUNT

Finally, once all your payments have transitioned and any loose ends have been tied up, you can move forward with how to close a bank account. Take one last look to make sure that every automatic payment has been fulfilled and moved over to the new account. If an automatic draft is left neglected, your old bank could be forced to reopen the account to make the payment.

There are usually a few different methods you can use to close a bank account. For one, you can go to your local bank branch, speak with a representative at that location and have them close your old account for you. Alternatively, you may be able to go onto your online banking site page and close it directly from there. The way you can close your bank account will depend on the institution.

Most of the time, you will need to get in touch with the customer service representatives for your bank via the phone, mail or a secure messaging platform to submit your request to close the account. Whichever method you use for how to close a bank account, always make sure you get confirmation in writing that the account has been officially closed. You will need this documentation for your records, but it is also important if any unexpected payment issues come up later with your old account.

REMEMBER TO CLOSE CONNECTED ACCOUNTS

One element that may be easy to forget when learning how to close a bank account is to close any account connected to or associated with it. For instance, if you are closing a checking account that came with a free savings account, you need to close both at the same time. Follow the same procedures as noted above to ensure that all money has transitioned over from your old bank to the new one.

You want to make sure that any accounts with your name on them are closed; otherwise, you could be vulnerable to having your identity stolen or facing account issues down the road. This is easy enough as you can submit your request to have a connected account closed at the same time you close out your former main account. You will need to have a zero balance to close everything out once and for all.

What To Do With Debit Cards & Checks – How To Close A Bank Account

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CUT UP OLD CARDS

One final important step in how to close a bank account is to cut up your old debit cards. You do not want to use one on accident and put yourself at risk for what could be considered fraudulent charges. Nor do you want to leave old debit cards ripe for misuse by an identity thief. It is better to be safe and cut them up so that no one else can use them, either by accident or maliciously, later on.

SHRED THOSE OLD CHECKS

Remember to shred any old checks you have. You never want to forget and write a bad check accidentally, nor do you want to leave them lying around where someone could have access to them and use them fraudulently.

Conclusion

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When you receive your confirmation letter from your old bank stating your old account is closed, keep it on file in your personal records for at least a couple years. You may need it later for tax purposes, and it is always good to have on hand to refer to, just in case.

If, after closing your account, you still notice charges coming through the old bank account, get in touch with them at once to resolve the matter. Always open your new bank account before closing out the old one so you have funds at your disposal and can transition smoothly. It is wise to look at any minimum balance terms and associated fees required by your new bank so you can ensure that any transfers and new withdrawals fall within those limits.

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