How to close a bank account

In a nutshell

The first step to closing a bank account is actually opening a new one. Then, any automatic transactions can be moved from the old account to the new account. Once you’re sure there are no more pending transactions in the old account, you can move any remaining funds to the new account and close the old one.

• First, open a new account and move all automatic transactions to the new account.
• Wait for all pending transactions on the old account to clear.
• Finally, close the old account and move any remaining funds.

Open a new account

If you’re closing your bank account because you want to change banks, you'll first need to open a new account at your new bank or credit union.

This will allow you to transition smoothly to the new bank with as little disruption to your finances as possible. You don't want to be completely without a bank account for any amount of time. That will make it difficult to meet your everyday banking needs.

Change scheduled payments or deposits

Once you have your new bank account open, you'll want to change any scheduled transactions you have set up so they go out of your new account. Review past statements from your old account to find all the automatic transactions you have set up. Automatic transactions are convenient, but they are easy to forget about. Some transactions to consider are:

• Bills on autopay.
• Subscriptions, including annual subscriptions.
• Buy now, pay later payments.
• Outstanding payments that haven't cleared yet.
• Automatic transfers to savings.
• Direct deposit.
• Automatic government payments.

Even after you've switched everything over, you may want to wait a while to ensure all your outstanding transactions have cleared. If a transaction comes through after you've closed the account, you might be charged fees or face other issues.

Transfer money to your new account

Once all transactions on the old account have cleared, move your funds to the new account. You can even link the two accounts together (if you’re comfortable) and transfer the money on your new bank's website or mobile app.

If you'd prefer to keep them separate, you can write a check from the old account and deposit it into the new account. If you don't have paper checks, request a cashier's check or money order.

Consider leaving enough money in the old account to cover any outstanding transactions that you may have forgotten about. Once you’re confident the old account is no longer needed, transfer the remaining funds to your new account.

Contact your bank to cancel the old account

After you’re set up with your new account and ready to close the old account, contact your old bank to get the ball rolling.

If you live near a physical branch, you can visit in person and have a banker close the account for you. If your bank doesn't have physical locations, simply call customer service to close it for you over the phone. Depending on the bank, you may also be able to close the account online.

Note that the account balance cannot be negative, otherwise you’ll need to bring it up to zero before closing the account. Also, some banks charge a fee for closing an account within a set amount of time after opening it. So, if you've recently opened the account, double-check for any account closure fees.

Get written confirmation that the account is closed

Once the old account is closed, contact customer service and ask for written confirmation that the account is closed. This will protect you from creditors should you ever have to prove you closed the account. This could come in handy if the bank reopens the account due to an automatic transaction coming in: A dated confirmation letter offers indisputable proof of an account closure.

How to close different types of accounts

The process for closing an account can vary depending on what type of account it is. Here are the processes for closing the most common accounts.

Joint accounts

Closing a joint account will follow many of the steps above — move any automatic payments or deposits and then transfer the funds to a new account. The big difference with joint accounts is that some banks may require both account owners to agree to the closure. Other banks may allow just one party to close the account.

To find out your bank’s policy, review your account agreement or contact customer service and ask if all parties are required for account closure.

Minor accounts

How the account is set up is important here. If it’s a joint account, you and the child are considered equal owners, and the account can be closed in the same manner as any other joint account.

However, if you have a custodial account with your child, it is legally your child's account, albeit managed by you. This means you can’t close the account on your own. When your child reaches the age of majority (this varies depending on your state and can be 18, 21 or older), the account becomes theirs, and they can then close the account if they wish.

If the account is a UTMA account, it cannot be closed before your child reaches the age of majority — and even then the account can be closed only by your child.

Inactive accounts

If you have an account you are no longer using, it's important to close it. If you leave an account inactive for long enough, the bank can actually close it themselves, and they don't even have to give you notice.

If an account has money in it but has no activity on it for three to five years, the bank must attempt to contact the owner. If there is no response from the account owner, the bank will send the money to the state's unclaimed property office.

Closing an inactive account is likely to be easier than closing an account you’re using, as there are unlikely any pending transactions. Simply transfer the balance to a new account and close the old account, which you can do in a branch, online or over the phone.

Overdrawn accounts

To close an overdrawn account, you must first bring the balance up to zero. Once you've deposited the required funds, you can close the account like you would any other.

Deceased person’s accounts

When someone dies, you'll first want to contact their bank and let them know. The bank can advise you on how to proceed and what documentation you'll need to close the account and access the funds.

If the account was a joint account, the other co-owner is likely now the sole owner. If that person wishes to close the account, they may do so. If the account is in a trust, the trustee can also take control of the account.

However, if the deceased person was the only account owner, it gets trickier. Power of attorney documents expire upon death, so if someone had a POA previously, it’s no longer valid. It's possible that the account has a beneficiary listed, which will give the beneficiary access to the funds upon the owner's death, sidestepping the probate process.

If there is no joint owner, trust or beneficiary, then the account becomes part of the deceased person's estate. You will need to have legal authority as an executor to manage the account, which can be given by the courts or stated in the decedent's will. The courts can give a "Letter of Testamentary'' or a "Letter of Administration." Either of these can give someone authority to access the account, and to close it if they wish.

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Generally, to close a bank account, you'll first want to move any automatic transactions from the old account to a new account. Once you’re 100% confident there are no more pending transactions on the old account, move the available funds to the new account and close the old one. Make sure to get confirmation of the account closure in writing, though.

Frequently asked questions (FAQs)

Does closing a bank account hurt your credit?

Closing a bank account will not hurt your credit as long as the account doesn't have a negative balance. If you have an account with a negative balance, it can be sent to collections, which may impact your score.

Can you close a bank account online?

Depending on the bank or credit union, you may be able to close your account on the financial institution’s website or mobile app.

Can a closed bank account be reopened?

This depends on why you closed the account and the bank's policies. If the account was closed due to fraud, it's unlikely you will be able to reopen it. If you can't reopen, consider opening a new account at the same bank.

How long do banks keep records of old accounts?

Banks are required to keep records of old accounts for at least five years, but may keep them longer.

If my bank account is closed, what happens to my direct deposit?

You'll want to redirect any direct deposits before closing the old account. For your paychecks, you’ll need to fill out a new form with your new bank account information. Other direct deposits you’ve already submitted, such as tax refund or Social Security payments, can be more difficult or even impossible to change.

If a direct deposit does hit a closed account, one of three things may happen. Most likely, the funds will be returned to the sender. However, the bank may also receive the funds and then mail you a paper check. Lastly, if the account was recently closed, the bank may reopen the account and allow the direct deposit to go through.

Can a bank close your account without notice?

Yes, your bank can close your account without notice. They can close it for many reasons, including suspicion of fraud, inactivity, a negative balance or policy violations.

If you feel your bank account was wrongfully closed, contact customer service and see if you can rectify the situation. If not, file a complaint with the Office of the Comptroller.