Unnecessary fees, poor service, or lack of business locations are just a few reasons you may choose to close a checking account at your current bank and take your business elsewhere. No matter what your reasoning is, understanding the process of closing an account tends to make the whole process smoother for everyone. While the process itself is simple, it is important to proceed in a precise fashion to avoid overdraft fees and other charges.
- Prepare Your Old and New Accounts
One of the most important things to consider is preparing your accounts for the transition. You’ll want to stop using the old account roughly two weeks before the switch to make sure all transactions clear before you close the account. Likewise, you’ll want to do your research to find a new banking location and take the necessary steps to open a new account. The associates at your new location should be able to help you open an account.
- Identify Automatic Payments
In a world of online banking, automatic payments make keeping track of bills and paying things on time particularly easy; however, switching accounts can complicate this process. Prior to switching accounts, make a list of all the automatic withdrawals and deposits attached to your old account. After you have created this list, complete any necessary paperwork from your employer or other income provider to switch the accounts where you will receive direct deposits and determine when the first deposits will be made. Once you have determined the date for the deposit transfer, arrange for your automatic withdrawals to also be transferred to the new account.
- Transfer Remaining Funds
After you have determined that all automatic payments have been made and that all checks and other payments have cleared the account you are closing, transfer the remaining funds from your old account into your new account. You can typically make this with an online transfer, a cashier’s check, or a personal check. While a personal check will likely be cheaper, making the transfer electronically or via a cashier’s check will likely make the funds available faster.
- Close the Old Account
After the transfer has cleared your new account, close your old account. You’ll likely need to write a letter requesting the bank close your account. Be sure to include your name, address, and account number are included in the letter. You may also want to include a phone number in case the bank needs to contact you. Request a written confirmation or letter that states the account has been closed and that all associated fees have been removed from the account.
- Opening the new account prior to closing the old ensures that you’ll have constant access to your money and funds.
- Remember to stop all of your direct deposits, transfers, and withdrawals to prevent any additional fees from the old or new account locations.
- Obtain written confirmation that the account has been closed to avoid any later issues such as identity theft.
With appropriate planning and organization, switching banks is a fairly simple process. Some banks even offer “switch kits” to help make the process even easier.