Is there a common practice to closing a checking & savings account?

For example, should I transfer all the funds electronically to my other bank then call and close it or is it better to get a check with the balance?

Have you ever come across penalties or hidden fees when doing this?

What method is most helpful when it comes to taxes?

Does this effect my credit score in any way?

Thank You!

  • 2
    Check with your new credit union or community bank. They often have helpful guides to transferring your banking to them.
    – MrChrister
    Commented Jul 6, 2012 at 23:26

2 Answers 2


Banks work pretty hard to make themselves a big part of your life with bill pay, auto-deposit, loans and other services. You need to carefully unwind each one and be on the lookout for fees. If you close a savings account, will your checking account suddenly have fees? If you stop auto deposit, will there suddenly be a fee?

  1. Setup your new account somewhere
  2. Setup your new bill pay and use it
  3. Setup your new auto deposit, and put either most or all of you checks in the new account.
  4. Stop using your old bill pay
  5. Make sure your auto deposit stops
  6. Stop any auto withdrawals ( and then never set them up again, use bill pay instead )
  7. Look back at a year of transactions to see anything that auto withdraws yearly
  8. Try to download as many statements and check images from the old bank as possible. Consider getting an entire year even if it costs a few dollars (per mhoran_psprep)

Do you have a business that deposits money? A Google Ad sense account? PayPal or the equivalent? These all might be tied to your bank accounts.

Wait a couple of months, leaving enough cash in the old back to prevent fees if possible. If two months go by and there isn't any activity on the account, you can probably close it.

After you are sure all the written checks have cleared, go to the back and get a counter check for the balance of the account.

You could alternately just write yourself one more check for the remaining balance and call the bank to close the account. You could electronically transfer the funds if you wanted too. HOWEVER, it is important to be careful of the timing, the last thing you want to do is write a check or transfer the money after the account is closed. (per Dilip Sarwate)

If you do the check and phone call thing, make sure you do it in a short enough period of time that you don't incur a fee.

Having and closing regular bank accounts won't have any tax implications in the US.

  • 3
    Download any transaction histories/statements/check images that you may need at tax time. The old bank will still send you a 1099 in January, but you may not be able to pull electronic records. Commented Jul 7, 2012 at 0:55
  • +1 for excellent advice. I will add a caveat though, writing a check to yourself to zero out the balance and calling the bank to close the account can result in an automatic charge for low balance even if only a few microseconds elapse between your check clearing and the account being closed. Better to go to a bank office, tell the bank officer/teller that you are closing the account, and get a cashier's check (sometimes called a bank draft or official check for the balance. Commented Jul 7, 2012 at 3:10
  • Every time I've closed an account (due to moving, etc), I've asked for the balance in cash - not a check
    – warren
    Commented Jul 10, 2012 at 15:44
  • @warren - you are certainly entitled to it. Depends on the balance. I haven't ever been there, but if want to withdraw a large amount of cash (say $10K) you will have to call ahead to arrange it.
    – MrChrister
    Commented Jul 10, 2012 at 16:19
  • @MrChrister - can't say as I've ever been blessed to be in the position of having a balance that high when I've closed an account, either :)
    – warren
    Commented Jul 10, 2012 at 16:30

If you use the account on a regular basis follow MrChrister's advice.

If you don't use the account very often the fastest method is to just transfer the money out and then call to close the account.

In the US there is no tax or credit score implications from closing an account.

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