4 Steps to Close Your Bank Account the Right Way

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Breaking up (with your bank) isn’t hard to do. 

No one enjoys break-ups, but some are definitely easier to bear than others. Ending a personal relationship can really stink, but if your old bank account just isn’t giving you the chance to earn much interest or charges you excessive fees, you’re likely happy at the prospect of finding a new home for your hard-earned cash. After all, a new bank account can come with perks like a higher APY, easier access to your money, and even a new account bonus.

Thankfully, closing your old bank account because you’re opening a new one isn’t an arduous process. And don’t worry, closing your old bank account won’t hurt your credit unless you had a negative balance you didn’t pay off. Here’s how to close that old account right, and ensure you don’t lose money in the process.

1. Open your new account(s)

First things first! If you’re closing an old bank account, you need to ensure you have a new account to send your money to. Maybe you’re getting a new checking account. Or perhaps you’ve got your eye on a high-yield savings account with an online-only bank, ensuring you’ll earn a very nice return on the cash you keep in it. Either way, open your new account and be sure you have the details on it (such as your account and routing number) handy.

2. Move your deposits and payments

If the account you’re closing is a checking account, odds are good that you were using it to pay bills and receive your paychecks. Go through your bank statements (usually available online these days) and make a list of everything that gets paid out of the account. Then you can arrange to have bills come out of your new account. If you don’t use automatic payments, you’ll need to update the account on file with your creditors, utility companies, and any other entities you pay money to.

While you’re at it, get in touch with your employer and update your bank account on file for direct deposit payments. And if you’ve got your old account linked to another financial institution, such as for making transfers for saving or investing, make sure you set those up with the new account.

3. Transfer your money to the new account

Once you’ve gotten your bill payments sorted out, it’s time to take whatever money is in your old account and move it to the new one. You don’t want to leave any money behind, but if you were unable to change an automatic payment at the last minute, you want to wait to make sure all pending payments are taken out of the old account. The last thing you want is to overdraft your old account, and if you close the account without paying the bank back, that’s when your credit could be negatively impacted. You could even be reported to ChexSystems, dinging your reputation as a banking customer and making it harder to open accounts in the future.

4. Get in touch with your old bank

This is your last step, but it’s still a very important one. You’ll need to contact your old bank to let it know that the account is empty (and have it confirm this), and you’re closing the account. You may need to provide something in writing, confirming your name, address, and account number. And it’s a good idea to also request written confirmation that your account is empty and closed, just in case you have an issue later.

Now you’ve got a shiny new bank account that’s ready to serve your financial needs, and you’ve concluded your relationship with your old bank. While there are a few hoops to jump through to reach this point, it’ll be worth it to know your money is safe and ready to help you achieve your goals.

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