Guide to Closing a Bank Account

Q: Can I close my bank account online?

Typically, closing a bank account online should be possible. But sometimes, the process is more complicated, such as when you close an account for a deceased person. Some banks might require you to call or visit a branch and fill out a written account closure request.

Q: Do you have to close your bank account yourself?

In most cases, someone can close your bank account for you if necessary. Depending on the situation, though, that can make things more complicated. Closing your account yourself will help you avoid roadblocks later.

Q: What happens when you close a bank account?

Your bank will likely check the account to be sure everything is in good standing before it allows you to close the account. If all is well, the bank will mark the account closed and, if necessary, transfer any money still in the account. Your bank can issue you a check for the remaining account balance if you haven’t already transferred all the money out.

Bob HaegeleUpdated February 24, 2023

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

Closing a bank account may be necessary from time to time. Doing so can be as simple as calling the bank and asking a representative to close the account for you. Sometimes you can close a bank account online; with some banks and credit unions, you might have to visit a branch to fill out some paperwork. This process should be straightforward, but issues sometimes arise. Fortunately, there are steps you can take ahead of time to help ease the process.

What Is Required to Close a Bank Account?

Banks have their own particular requirements for how to close a bank account. You’ll probably have to provide your account number and other relevant information. You may have to fill out an account closing form. As noted, this could be online or it may require you to visit a branch.

How Long Does It Take to Close a Bank Account?

Closing a bank account could just take a few minutes, if there are no fees or charges outstanding and you have a zero balance. In some situations, though, it may take longer. For example, if there are debit transactions that haven't been posted to your account yet, you may have to wait one or two business days for them to clear. After that, you can safely shut down the account.

8 Steps to Closing a Bank Account

As you sort out how to close a bank account, you may want to give yourself some extra time upfront. Taking certain steps in advance can help you avoid problems or delays later.

1. Open a New Bank Account

Before you close your current account, you’ll likely need to withdraw or transfer the money in that account. You may already have a second account to move the money to. If not, consider opening a new account days or weeks before closing the old one.Many banks allow you to open an account online. Those that don’t will probably ask you to visit a branch of your new bank. Regardless, to open an account, you’ll need to provide basic info like your Social Security number and birthdate, plus documentation such as a government-issued photo ID or passport. Recommended: Opening a Savings Account in 2022

2. Transfer Money to Your New Account

At this point, you can transfer money from your old account to the new one. Your new bank may have a minimum balance requirement. If so, deposit at least that minimum amount to avoid the associated fee.If there are any outstanding payments from the old account, make sure you keep enough funds there to cover them. Otherwise, you may be subject to overdraft fees from the old bank.

3. Change Your Automatic Payment Settings

Update any automatic payments with your new account information. Recurring payments might include expenses like health insurance premiums, car loan payments, business services, or utility bills. You may need to wait a few days or weeks to be sure the payments are coming out of the new account as planned.

4. Clear All Pending Payments

Even after you’ve redirected your automatic payments to the new account, there may still be some transactions pending on the old one. Wait for those to clear before closing the account. Bear in mind that bank transactions usually take one to two business days. If a payment is initiated on a Friday, it may not clear your account until the following week.

5. Change Direct Deposit Information

If your employer pays you via direct deposit to the old bank account, inform them and update your account information as soon as you can. Be ready to provide your new account and routing numbers.

6. Contact Your Bank About Closing Your Account

After making these arrangements, it’s time to tell your old bank that you want to close your account. Ask them, “Can I close my bank account online?” If the answer’s no, you can call, write a letter, or visit a branch. Each bank has its own procedure for how to close a bank account and will help walk you through the process. You may want to decouple the old account from any linked savings or credit card accounts.

7. Sign the Closing Forms

Your bank may require you to sign account closing forms as a final step. If the documents require notarization, see if a notary is available at your branch.

8. Confirm in Writing That It's Closed

Finally, request that the bank send you written confirmation of the closure. Having that document will be useful if any account issues arise later. If you don’t receive written confirmation promptly, you may want to follow up with your bank. Recommended: What Happens When the Bank Closes Your Account

What Can Go Wrong When Closing a Bank Account?

Even if you have done your due diligence, something can still go wrong when you’re closing a bank account. Here are some possible complications.

Overdraft Fees

You can incur overdraft fees on an account that you’re trying to close. For example, if you forgot to update an automatic payment, the payee would charge the old account, and the bank would impose an overdraft fee when the funds were insufficient. What’s more, if your account is overdrawn, the bank may refuse to close it until it has a zero balance.

Checks Bouncing

Similarly, you could bounce a check if you’re writing it on your closed account. To avoid this situation, request checks for your new account as soon as possible and shred your old checks. Once the new account has a balance, write a check from your new checkbook.

Inactivity Fees

If you open a new bank account but don’t close the old one, you might incur inactivity fees. Some banks will mark accounts inactive after a certain number of days without transactions, and may charge you for it. After a given period of inactivity, the bank may close the account.This type of closure is different from delinquent accounts, which generally refer to credit cards.Recommended: Closing a Bank Account Early: Fees You Should Know About

Closing a Bank Account for Someone Else

You may have to figure out how to close bank accounts that are shared or in the name of someone else. Those situations may require additional steps.

Deceased Person

The process of closing a deceased person’s bank account will vary depending on whether they had a will and an executor. Probate court authorization letters are sometimes necessary. In such cases, working with an attorney may be appropriate, especially if the amount of money is significant.

Joint Bank Accounts

Closing a joint bank account might be a challenge if, say, the account is held by two partners who have separated. A bank may require authorization from both account holders in order to close the account. Alternatively, it may not require both account holders to be present. Contact your bank to ask about its policies and process.

Account Created by a Parent for You

You might still have a bank account from your childhood that a parent set up for you. As an adult, you can often close these accounts without any extra steps. Some accounts for children convert automatically to a normal bank account when the child reaches adulthood. Check with your institution about how to close bank accounts created for children.

The Takeaway

Closing a bank account can take just a few minutes, especially if you do certain things ahead of time, such as transferring your money to another account and updating automatic payments. If you have outstanding transactions, closing the account may require one or two business days, if not more. In some cases, you can close a bank account online, though not always — you may have to call or visit a branch. The money you’ve withdrawn from your closed account might earn higher interest if you deposit it in a high-yield savings account. Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

Can I close my bank account online?

Do you have to close your bank account yourself?

What happens when you close a bank account?

Photo credit: iStock/PeopleImages

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About the Author

Bob Haegele

Bob Haegele is a personal finance writer dedicated to helping others improve their finances, build wealth, and establish a stable, long-term financial plan. His expertise extends to topics such as investing, student loans, and credit cards, and his work has appeared on outlets such as Business Insider, Bankrate, GOBankingRates, and CreditCards.com.

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