How to Close a Checking Account

Having a checking account helps ensure financial stability. These days, you can even link your checking account online to creditors directly to ensure prompt payment for goods or services rendered. What do you do when you need to close your checking account and how do you make sure your credit rating is not negatively affected?

Many think the process of cancelling a checking account will be a long, drawn out process, especially if you have been with this financial institution for a long time. Surprisingly enough, the way you complete this task is pretty simple and straightforward.

1. Open your new account first. Never close your current checking account without opening your new account first.


2. Give yourself a 30-day minimum to get your finances in order; this includes any checks that you have written or deposits that you have made. If you have direct deposit set up through your employer, you need to cancel immediately. Most direct deposit cancellations have a specific time frame so make that your first move. Your employer should have enough time to transition your paycheck to your new financial institution.


3. Cancel all of your auto-deductions. Things such as car insurance and mortgage payments take time to transfer. Make sure you stop them well in advance. According to federal law, you must provide your financial institution with a minimum of three days notice to close an auto-deduction. Some may require that your request be made in written form. Find out the facts and make sure you don't have any payments pending.


4. Know the fees associated with canceling your account. While many large banks will accept your request over the phone, most will charge a fee for processing the cancellation. These fees can be expensive. You may also be responsible for settling any monthly fees that are associated with your checking account.


5. Go into your bank and remove everything from your safe-deposit box. You will also need to return the key.