How to Close Your Checking Account
When you move or decide to change banks, you will need to close your checking account. This is a relatively simple process, but there are certain steps you should take to ensure you close your account correctly and don't get hit with any overdraft charges, fees, or other issues. Some situations will be different, like joint accounts. Follow the below steps to close your checking account successfully.
Allow Everything to Clear and Turn Off Automatic Payments
First, you need to stop using the account to allow all charges to clear completely before you close it. Generally, this takes about two weeks, but it may take longer, depending on your bank. Be sure to check online to see which transactions are still outstanding. It also helps to keep a running balance of your account so that you know what has cleared and what has not.
You also need to cancel all automatic payments you have set up through your old account; the last thing you want to happen is an automatic payment to go through on your old account and have it overdraft your account or not go through if the account has already closed. A good way to make sure all automatic payments are taken care of is to make a list of recurring payments, then mark them off once you've canceled them through your old account and set them up with your new account. This may take a billing cycle or two, so you may have to manually pay some bills in the meantime.
Transfer Your Money to Your New Account and Close Your Old Account
The next step you should take when closing your account is transfer your money from your old checking account to your new checking account. Be extra mindful of any pending charges on your old account, so you don't overdraft the account or incur any fees. Also, be sure to see if your old bank has a transfer limit, as many banks limit the amount you can transfer or withdrawal at a time.
Once everything has cleared your account, you will need to close it. If you do not go in person you will need to write a letter requesting that they close your account. Important items to include are your name, address, and account number. You can also request that a letter is sent to you to confirm that your account has been closed.
Close Any Related Accounts
Another important step to take when closing your checking account is to ensure that any related accounts are closed. Many checking accounts offer a free savings account. It's essential to ensure that you close any other accounts tied to your name, as it could potentially cause issues if your identity is stolen or someone tries to reopen the account in your name. You can request that this is closed in the same letter you use to close your bank account. Your balance will need to be at zero in order to do this.
Destroy Your Checks and Debit Card
Once you have requested your account to be closed, you need to shred any remaining checks and cut up your debit card. You do not want to accidentally use the checks or debit card, lose them, or have someone use them fraudulently. This step is absolutely essential and could be an expensive mistake if you do not do this.
Keep Records on File
When you receive your confirmation letter that your account has been closed, file the letter with your account information for a few years. You should also keep an eye on your credit report, to make sure nothing else happens with that account or bank. If you do see any charges on that account or with your old bank, contact the bank immediately.
- Open your new account before you close your old account. This allows you continued access to your money. It is also helpful if you are moving, so you can continue to have access to your funds to pay movers, rental cars, and other related costs during the move.
- Be sure that you stop all direct deposits, automatic transfers, and withdrawals from your account. You should do this about a month before you close your account. These include things like gym membership fees, insurance payments, and other household bills.
- When you look for a new account, be sure that you consider the minimum balance requirements and fees that you may incur at your new bank. Also be sure to educate yourself on withdrawal and transfer limits.
Updated by Rachel Morgan Cautero