Bank accounts aren’t for everyone. Those who don’t have bank accounts are often referred to as the “unbanked” and are considered financially vulnerable.
There are many ways to go about your personal finance and business finance. Sometimes your finances include needing to learn how to close a bank account.
Maybe you want to set up an account somewhere else. Maybe you want to close the account because overdraft fees are too high.
Whatever the reason, we're here to help you figure out how to close a bank account in 5 simple steps.
Control Your Spending and Save more with a Prepaid Card
How to Close a Bank Account
When learning how to close a bank account, it's important to know what you need to get done before closing the account.
Follow the next 5 steps to not only learn how to close a bank account, but how to prepare to close a bank account.
Step 1: Stop automatic payments
If you have any automatic payments set up, you'll want to stop all of those before closing the account.
You might have automatic payments set up for recurring payments like credit card payments or bill payments.
Step 2: Clear all your charges and pending payments
If you have any charges or pending payments, you'll need to pay those or wait for the payments to go through before you close your account.
You'll also want to make sure all those payments process completely before you close the account.
Step 3: Download documents
Download any important documents for your personal files.
Download files like credit reports, joint account forms, bank statements, account closure forms, and any other account information.
Step 4: Transfer money
Now that you've taken care of all the business affiliated with your account, you're ready to transfer money.
You might want to transfer money into a new joint account or a new financial institution.
Step 5: Close the account
After you transfer money, it's time to close the account.
You can close the account in person, over the phone, by mail, or online, but every bank is different.
Talk to your bank to know for sure what their process for account closure might be.
Don't forget to get a confirmation of the account closure afterwards.
Can You Close a Bank Account Online?
Can you close a bank account online?
If you don't want to visit a bank location, you might be wondering, can I close a bank account online?
This may depend on the bank. Many financial institutions allow account holders to close a bank account online, but some require the account holder to come in person, or in the very least, call customer service directly.
So can I close a bank account online? The answer is, it depends on your bank.
Many banks will at least let account holders start the account closure process online.
If you can find an account closure request form online, then start the process. But it never hurts to call customer service or visit your nearby branch as well.
Does Closing a Bank Account Hurt Your Credit?
Does closing a bank account hurt your credit?
Closing a credit card account can have an impact on your credit score but closing a debit card account generally does not.
So, if your bank account includes a credit card account, this could affect your credit score.
Avoid negative effects on your credit score by paying off any negative balances, fees, or credit card amounts before closing a bank account.
5 Reasons to Close a Bank Account
Even if you don't want to leave the banking system entirely, there are still many reasons some can have for closing a bank account.
1. Poor Customer Service
When you're using a financial institution, you are trusting them with your personal finances. The least you can expect is great customer service.
By closing a bank account and moving to a new bank, or by using alternative financial services like Check City's Check Cashing Services, you can find the personal, warm customer service you deserve.
2. Becoming Unbanked
Some people choose to be what's called "unbanked." This means that you choose to not have a bank account.
Some people choose to be unbanked to avoid bank fees or because they prefer alternative financial institutions.
If you decide to become unbanked, then you may need to learn how to close a bank account.
3. Bank Availability
If you are moving or travel very often, you might need to learn how to close a bank account so you can open a more travel-friendly bank account.
Some banks are available nationwide while others are only available in a few states. Some banks are also available internationally while others are only available in the US.
If you travel a lot, or if you're moving, you may need to close your bank account and start anew with a bank that has better availability for your needs.
4. Requirements and Fees
Another reason to learn how to close a bank account is to avoid bank account requirements and fees.
Some bank accounts will have minimum balance requirements, overdraft fees, fees to transfer money, or fees for negative balances.
If the bank statements start including too many fees, it might be time to think about account closure.
5. Switching Banks
Sometimes you want to close your bank account to start an account somewhere else instead.
Debit card accounts and credit card accounts all come with their terms and conditions at each bank.
Banks all come with their own pros and cons. If you want to switch bank accounts, then you need to learn how to close a bank account, so you can open one somewhere else.
In Conclusion,
There are many valid reasons for closing a bank account.
Whether you are leaving the banking system in favor of alternative financial services, or merely switching banks, you can use these tips to make the transition smoother.
