How to Close a Joint Bank Account
Joint accounts make it easy for multiple people to share an account. But all good things must end, and it’s best to close joint bank accounts when you no longer need them. Depending on your bank’s rules, that process might be painless—or a major pain.
Leave it open? When you have unresponsive or uncooperative co-owners on the account, it may be tempting to just leave an account open. But closing your joint bank accounts as soon as possible protects you in several ways:
- Prevent penalties: Prevent other account holders from using the account. If they try to spend money (especially money that doesn’t exist) and rack up penalty charges in the account, the account balance could go negative. You’ll have to bring it back up to zero to close the account.
- Minimize fees: Put an end to monthly fees and inactivity charges. Why pay for something you’re not using?
- Legal liability: Even if you’re the only one using the account and you trust the other person, joint account holders technically own funds in the account. If another account holder gets sued (for unpaid debts or an automobile accident, for example), creditors can potentially take your money.
- Clean break: Sometimes you want to put the past behind you. Closing old accounts can provide emotional relief and eliminate unwanted reminders.
Joint accounts allow full access to each account owner. As a result, an individual can typically spend all of the money from an account without approval from others.
That’s convenient for busy families and business partners who want to operate efficiently. But things can get complicated when partnerships end. Before you move money or close an account, determine whether or not you have a legal right to some or all of the money, and evaluate how other account holders may react if you move forward without their input.
How to Close Joint Bank Accounts
The process for closing accounts depends on your bank, and some banks make it easier than others. If you need to move immediately, contact your bank or credit union’s customer service department.
Who needs to approve? Some banks allow any account holder to close a joint account individually. But some banks are still hesitant to let customers shut down accounts unilaterally, so they require permission from each and every account owner to process your request. If you’ve restricted your account by requiring every account owner to approve payments, those restrictions may apply to other account activities as well.
How to request: Again, bank policies dictate how you’ll need to submit instructions.
- Online and apps: Some banks allow you to close joint accounts online, either through an automated process or by writing to Customer Service while logged in to your account.
- Mail: Other banks take instructions in writing (with one or more original signatures required).
- Phone: It may be possible to call a customer service representative and close your account verbally.
- In person: The most cumbersome requirement—which still exists at some banks—is that all account owners need to visit a branch in person to close an account. If that’s the case, be sure to bring a photo ID and allow for plenty of time to complete the process.
Online banks tend to be easiest to work with, and traditional banks are more likely to require all account holders to appear in person. For example, both Ally Bank and Capital One 360 allow any account owner to close a joint account—and do it online.
Closing an account can have consequences. If things go badly, you may miss payments, bounce checks, and pay unnecessary fees. To prevent any surprises, follow this detailed checklist for switching banks. As an overview, you need to:
- Get your account balance to zero. Deposit funds to make up for any shortfall, or decide how you’d like your bank to distribute any money left in the account upon closing. Banks can wire money and mail checks, or you can transfer the money out yourself.
- Stop all withdrawals. Prevent expensive overdrafts and delays in closing your account. Ensure that all outstanding checks have been settled, and cancel any automatic bill payments. Research the past 12 months of activity so you don’t forget anything. Destroy debit cards and checks linked to the account to prevent mistakes.
- Get your new account ready. Be sure you’re up and running with another account. You’ll need to be able to receive payments, spend money, pay bills, and store cash.
- Ask your bank to close the old account. Again, find out what the requirements are—who can request the closure, how to communicate your request, and so on.
Avoid Legal Trouble
Because each account owner typically has access to 100 percent of the money in a joint bank account, anybody can empty an account without permission from the other account owners. That can cause problems in several ways:
- You might not have a legal right to money you take, even though your bank gives you the authority to withdraw the money and close the account. For example, a divorce decree might say that funds belong to an ex-spouse.
- Another account owner can drain your account without your knowledge. If you don’t trust your joint account holders, speak with a local attorney to discuss options to protect yourself.
Communication can go a long way toward reducing your legal bills. If possible, discuss how to split funds from a joint account so that things don’t get any worse.