You might need to close your current bank account for various reasons. These can include reasons like you have found better options at another bank, your employer needs you to open a new account and more. However, closing an account at the bank is not a trivial process. You need a premeditated plan with numerous details to close it.
To initiate this closing process, you need to contact your bank or take a stroll to your branch, depending upon your choice. However, you first need to prepare certain documents and acquire details to simplify the process. Let’s have a look at the steps that you need to take to close a savings or checking account at a bank.
Select an ideal account
You need to choose an ideal account so that you can manage your funds when you close the other one. You need to scour the market to find a bank that provides a checking or savings account that fits your needs. These features can include.
Zero Monthly Fee
You need to find a bank that doesn’t impose a high fee or minimum deposit fees. Even if there is a fee, there should be ways to waive it, so you can save your money.
These added benefits can be higher interest rates, a vast ATM network, a sign-up bonus, and other such value additions.
Ease of access
You need a bank account that does not limit your access to the funds. It should be in connection with a good number of ATMs, have a good branch network, and allow faster online transfers.
Impeccable customer support
In case you stumble across any problems that cannot be solved with generic knowledge, a support team should always be available to help you through the solution.
Other than these essential features, you should also consider choosing between non-banks, credit unions, financial banks, and online banks. Each of them has some perks that might be in accordance with your needs.
Open the new account
To open a new account, you need to fulfill some formalities, these include providing your ID, and other information such as contact number, address, social security number, etc. You can transfer the funds from your account by linking the previous account or sending money through cash or cheque. You can also open multiple savings or checking accounts at different banks to retain your money and acquire higher interest rates.
Note down withdrawals and deposits of previous account
To find these transactions, you can check your bank history or statement. Through that, you can create a record of all the bills, subscriptions, transfers, and direct deposits, and other automated transfers. To find an annual subscription, check an annual bank statement.
Transfer money and automatic bills to new account
To do this, you will need to inform your bank and update your information for the subscriptions, services, and bills that you usually pay for different services. For example, monthly subscriptions of Netflix or Amazon Prime. If your account receives funds from the employer through direct deposits, make provision for transferring them to your new account.
Ensure old account is closed
To make sure that your old account is closed, you need to get in touch with your bank either offline or online. You can give them a call, do a live chat, or message them. Some obligations like filling out a form might also be part of the process. Your bank will try to coerce you into staying, but you should not fall into that trap.
The best bet is to give a written application. Once this is over, get it in writing from the bank, so they do not restart your account for any automatic bills. For instance, the bank can restart the account which might lead to an overdraft. As such, written proof of closing is crucial.
Frequently Asked Questions
Can I close accounts online?
This provision is dependent on the fact that the institution provides such a provision. The policies differ from bank to bank. Some people close accounts through a message on their customer service chat; some banks conduct this process through a call too.
Can the bank close my account without notice?
Banks can close an account in case of overdrafts or negative balances, or in cases of fraudulent practices. If this occurs with you, you will need to learn about ChexSystems, they have aggregate information about all misused savings and checking accounts.
Will my credit be affected while closing an account?
It does not affect your credit as Equifax, Experian, and TransUnion don’t keep a record of different accounts. However, in case your account is in an overdraft or has a negative balance or unpaid fees, then ChexSystems will have a negative report on your name. ChexSystems does not have an influence over the credit, but if you have unpaid debts, it will impact you.
What to do if the bank does not allow me to open an account?
This can be because of two cases. Either the bank is unable to locate your property or you are not in a position to open an account. If the reason is the former, check with the bank and verify your details again. If it’s the latter, you will have to settle your debts or improve the records with ChexSystems. This is because more than 80% of credit unions and financial institutions use ChexSystems.
Do I have to pay a fee to close an account?
Most banks don’t charge any closing fee for your bank account but such can happen when you close the account within a short time of creating it. This is the early account closure fee that comes into play if you close your account within 180 days.