Look online and you’ll notice that many financial institutions are more than happy to provide information about how to open a new account. When it comes to closing an account, though, you won’t find the same wealth of information.
To be fair, the idea of closing a bank account is a lot less fun to think about than opening a new one. However, you should know how to close out your current account, whether it’s because you’re switching financial institutions or simply because you’re cutting down on the number of accounts you have.
Transfer All Your Automatic Bill Payments and Direct Deposits
Before closing out a bank account, your first step should be to transfer all automatic payments being processed through it. Go through your bank statements from at least the past two months and at most the past year and see what automatic transactions you have set up with your account, including automatic bill payments and direct deposits.
Completing this step before closing your account is vital. If you don’t transfer your direct deposit, you could find yourself waiting for a while to get your money as your bank and your employer will have to figure out what is going on and then contact you to fix the problem. However, if you don’t transfer your automatic bill payments, you’ll either get several notices in the mail letting you know your payment is late, or worse, a call from a collections agency wondering why you haven’t paid your bills.
Once you've transferred your automatic bill payments and direct deposits to your new transaction, you'll want to make sure none of your transactions have been overlooked. Keep your old account open for a month or two, and make sure you have enough money in it to cover one month's worth of bills. Once you're certain all your transactions have been transferred to your new account, you can close your old one.
Let Your Bank Know You Want to Close Your Account
Once you’ve taken care of your electronic bill payments and direct deposit, you can contact your financial institution to let them know you’re closing your account. Since every financial institution is different, the process of closing your account will depend on where you do your banking. However, most financial institutions either want you to close your account in person or submit a request in writing, complete with identifying information and a signature. Once you’ve closed the account, the teller will give you the balance in your account, usually as a check.
Get a Hard Copy Confirmation of Your Account Closure
After you’ve closed your account, make sure to get a hard copy record to keep for your files. Occasionally, financial institutions can accidentally reactivate an account due to an error caused by a company trying to draw money from it. If you have a hard copy confirmation, you’ll be able to prove you closed the account and potentially avoid having to pay maintenance or insufficient funds fees.
Manage Your Accounts Easily at First Alliance Credit Union
Closing a bank account is easy but you will want to make sure you’re organized when you do it, especially as far as automatic payments are concerned.
If you’re looking for a new financial institution, switch to First Alliance Credit Union today. You can manage your money, including electronic bill payments, in our online banking center and our mobile app, as well as get help with switching financial accounts in our resource center.
Want to learn more about switching financial institutions? Listen to episode 29 of our Good Money Moves podcast, which discusses switching bank accounts.