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Sometimes you need to change banks, or move your money from one account to another. Oftentimes, these situations mean you need to close a checking account or savings account. This guide will walk you through how to close a savings account.
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Introduction
- As your life and financial circumstances change, you might need to move money around, open new accounts or close existing ones. Here is the process for closing a savings account.
Step 1: Stop Automatic Deposits or Withdrawals
- If any bills are automatically withdrawn from your savings account on a regular basis you need to make sure to notify those billers that you are closing your savings account. Be ready to provide them with the information for the account bills should now be withdrawn from.
- Stop any direct deposits or automatic transfers into your savings account.
- Make sure not to close your account until you verify that these deposits and/or withdrawals have transferred to the newly designated accounts.
Step 2: Determine if You Need to Keep a Minimum Balance
- Many savings accounts require you to keep a minimum balance to avoid accruing penalties and fees. Even if you intend to close your account, if time passes between you withdrawing your funds and the account actually closing, your financial institution can assess fees. These fees can put your account into overdrawn status, which could in turn lead to damaged credit or being sent to collections if the fees aren't paid.
Step 3: Ensure Your Account Has a $0 or Positive Balance
- After you determine if you need to keep a minimum balance, withdraw or transfer the remaining funds.
- You cannot close your account if you have a negative account balance. Be sure to keep the required minimum as needed, as well as cover any withdrawals that have not yet cleared.
Step 4: Request Account Closure
- Different financial institutions have different requirements for requesting account closure.
- Some banks will ask you to walk into your local branch to request your account be closed. Many times this is to verify identity as well as ask you why you are closing your account.
- More commonly, banks will ask you to request account closure in writing. Be sure to sign your request as well as give account information for where you want any remaining funds in your savings account transferred to.
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