How to Close Your Bank Account Properly

By taking the right steps when switching banks, you can ensure a seamless transition.

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Leaving your bank can be a daunting task. A recent survey by the Consumer Reports National Research Center found that one in five consumers considered switching banks but didn’t because of the hassle, effort, and fees involved with the process. However, the entire ordeal is not as intimidating with a planned approach.

And, there are also some consumers who, in the spur of the moment, prefer to close their accounts on a whim. Although it is a satisfying display of the power held by consumers, it could lead to even more inconvenience.

By taking the right steps when switching banks, you could ensure a seamless transition and free yourself from plenty of headaches.

1. Find your new bank.

Before closing your old bank accounts, you should have a new bank ready to receive your money. If you close your bank accounts and then start looking for a new bank, you may find yourself inconvenienced when you need to write a check, transfer money, or pay a bill.

2. Review and transfer automatic payments and recurring transactions.

Since banks allow customers to automate much of their finances, consumers who want to leave banks found themselves hindered by the chore of having to re-establish that automatic flow of money. In most cases, however, the transition simply requires you to change the bank account number and routing number.

Review your bank statements for the past six to 12 months so you can identify which automated transactions need to be rerouted to your new bank. These transactions could include rent payments, bill payments, direct deposit, and automatic fund transfers. You may also find infrequent transactions that also draw from your old accounts.

After rerouting these automated transactions, give it two to three weeks for these transactions to shift to your new bank accounts.

3. Transfer the money from your old bank to your new bank.

When you have confirmed that automatic transactions have been re-routed properly, you can begin to move your money to the new bank. You can do so without telling your old bank that you plan to close your accounts. Be cognizant of any withdrawal or transfer limits if there is a large amount of cash in your old accounts.

4. Close the account and request a written letter.

Now, go to the bank and ask for your accounts to be closed. If you didn’t already move your money out, you will receive the balances in your accounts in the form of a check.

Many consumers have complained of “zombie” accounts, which occur when a bank re-opens an account because a company attempted to draw money from it. Closed accounts were often reactivated because of billing errors or when customers forgot about an automated bill payment.

So, it is important to request a written letter that states that your accounts are closed—just in case you have to settle any discrepancies in the future.

With some planning, switching banks isn’t such a terrifying experience. In the future, the Consumer Financial Protection Bureau may even make it easier for consumers to switch banks.

Simon Zhen is a columnist and a staff writer for His columns cover all aspects of personal finance with a particular emphasis on bank rates, products and services.