Closing a Bank Account Early: Fees You Should Know About

Jacqueline DeMarcoUpdated April 14, 2025

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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 might seem simple, but doing it too soon could cost you. Many banks charge early account closure fees if you close your account within a specific period — often 90 to 180 days after opening. Understanding these fees and knowing how to avoid them can help you make smart financial decisions when switching banks or consolidating accounts. Let’s break down what you need to know about closing a bank account early, including how to avoid any problems and what fees you may expect.

Reasons to Close a Bank Account Early

There are any number of reasons why you might decide to close a bank account early. These include:

Finding better interest rates at a different bank or credit union
Finding a bank account with no or lower fees
Deciding to switch from a brick-and-mortar bank to an online-only bank
Making the move to a credit union after qualifying for membership
Looking for different account features (such as a better mobile app experience)
Dissatisfaction with customer service
Moving to a new city or town

The good news is that you don’t have to provide any particular reason to close a checking or savings account at a bank or credit union. Generally, all you have to do is call the institution or visit in person to make the request. Most states require that, after receiving a request from a customer to close a bank account, the bank or credit union must do so in a reasonable amount of time, provided the customer doesn’t have any outstanding balances due to overdrawing their account.Recommended: Guide to High-Yield Savings Accounts

Steps to Close a Bank Account

If you’ve decided you want to part ways with your current bank or credit union, here are some steps that can help streamline the process.

Open your new bank account. Before taking the steps to close a bank account, it’s a good idea to open a new account first so you have a place to transfer any funds out of your old account. You’ll also need a new account to use for any direct deposits or automatic payments that were linked to your old account.
Make sure you have a positive balance. Generally, it’s not possible to close a bank account with a negative balance (which can occur after overdrawing an account or being charged fees). To expedite the account closure process, check to make sure your balance is positive and, if it’s not, deposit enough funds to bring it into positive territory.
Update any direct deposits or automatic bill payments. If you have any recurring deposits (like direct deposit at work) or automatic bill payments linked to the account, you’ll want to update those accounts with your new banking information. You’ll also want to make sure the changes have gone into effect before you close your old account.
Transfer cash. Before finally closing out the account, you’ll want to make sure to transfer any funds in your old account to your new bank account. This can usually be done via an electronic transfer or check.
Ask the bank to close your account. Depending on the bank, you can do this in one of three ways: calling the customer service line, submitting a written cancellation request, or visiting a local branch and making the request in person.

Recommended: What Happens When the Bank Closes Your Account?

Early Account Closure Fees

Fees are one of the ways that banks make money. Is there a fee for closing a bank account? Sometimes.Some banks will charge an account closure fee if the account hasn’t been open for long. This helps them recoup the administrative costs of opening the account, and also encourages customers to stick around. Depending on the bank, early closure fees can run anywhere from $5 to $50. Usually to avoid an early account closure fee, all you need to do is keep your new account open for 90 to 180 days. It’s a good idea to check what your bank’s rules are before you move forward with closing your account. If you find out you’re going to get hit with a fee for closing your account early, you can then decide whether you’d rather wait to close the account or it’s still worth making the switch, despite the fee.Keep in mind that It’s generally not a good idea to keep an account open and simply stop using it in order to avoid a closing fee. Some banks will actually charge an inactivity (or dormancy) fee if you leave your account untouched for a certain period of time.

The Takeaway

There are many reasons why you might want to switch to a new bank or credit union and, generally, the process is relatively easy — and free. If you decide to close a bank account within six months of opening it, however, you could potentially get hit with an early account closure fee. Depending on the amount of the fee, it may still be worth switching to a different bank, particularly if you can find an account that offers a significantly higher annual percentage yield (APY) and charges lower, or no, monthly fees.If you’re looking for a new savings account that offers a higher return and lower fees than your current bank account, Lantern by SoFi can help. With our online banking marketplace, it’s easy to compare high-yield savings accounts based on APY, fees, and balance minimums.Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

How do I avoid account maintenance fees?

Are account closure fees legal?

Do I need a reason to close my bank account?

Photo credit: iStock/mixetto

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About the Author

Jacqueline DeMarco

Jacqueline DeMarco is a personal finance writer and editor based in Southern California. While she spends the bulk of her time writing about complex financial issues, she also tackles a variety of subjects ranging from food to fashion to travel. Her work can be found across dozens of publications such as Credit Karma, LendingTree, Northwestern Mutual, The Everygirl, and Apartment Therapy.

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