The cost to close a bank account is usually nothing. Most banks let you walk away free, but a handful of charges can appear depending on how long you’ve had the account, whether it’s overdrawn, whether you hold a CD there, and how you ask for your remaining money. Expect anywhere from $0 to roughly $50 in direct fees, with larger hits possible if you break a CD early.
Early Closure Fees
If you close an account shortly after opening it, the bank may charge an early closure fee. The window is typically the first 90 to 180 days, and the charge runs from about $5 at some credit unions up to $50 at larger banks. Not every institution charges one. Your deposit account agreement or fee schedule will say, and federal law requires that disclosure to be in writing before or at the time you open the account.1eCFR. 12 CFR Part 1030 – Truth in Savings (Regulation DD)
If a fee applies, the bank deducts it from your remaining balance at closure. Some banks waive it for qualifying reasons such as military deployment or a move outside the bank’s service area. Ask before you pay.
You Have to Clear a Negative Balance First
A bank will not close an account that’s in the red. You have to bring it to zero or above, which means paying back the overdraft plus any fees that piled on. Overdraft fees average around $27 per transaction, though Capital One, Citibank, Ally, and several others have eliminated them entirely.
Before you pay, look at the fees themselves. If you never opted in to overdraft coverage for debit card and ATM transactions, the bank shouldn’t be charging overdraft fees on one-time debit purchases or ATM withdrawals; federal rules require your written or electronic consent first.2eCFR. 12 CFR 1005.17 – Requirements for Overdraft Services Charges you didn’t consent to can be disputed.
Walking away from a negative balance is the most expensive mistake you can make here. The bank can send the debt to collections, which may report it to the three major credit bureaus and lower your credit score.3Consumer Financial Protection Bureau. Will It Hurt My Credit if My Bank or Credit Union Closed My Checking Account The bank can also report the closure to ChexSystems or Early Warning Services, where a negative record can sit for five years and make it hard to open an account elsewhere.4HelpWithMyBank.gov. How Long Does Negative Information Stay on ChexSystems and EWS Reports
CD Early Withdrawal Penalty
If you also hold a certificate of deposit at the bank you’re leaving, pulling that money out before maturity triggers a separate penalty. Federal law sets a minimum of seven days’ simple interest if you withdraw within the first six days after deposit, but there’s no federal cap beyond that.5HelpWithMyBank.gov. What Are the Penalties for Withdrawing Money Early From a CD In practice, banks commonly charge between 90 days and a full year of interest, scaled to the CD’s term. Check your CD agreement for the exact figure before you decide whether to break it or wait for the maturity date. You don’t have to close your CD to close your checking or savings account; the two are separate products.
How You Get Your Final Balance
The method you choose to receive your remaining money can carry its own charge. A domestic outgoing wire transfer typically costs $25 to $30, and some banks charge for a cashier’s check. The free options are usually an ACH transfer to your new bank or a mailed paper check. If you close in person at a branch, you can generally take the balance in cash or have the bank cut a check on the spot at no cost.
Effects on Your Credit and Future Bank Applications
Closing an account in good standing does not hurt your credit score. Banks and credit unions don’t report deposit account information, including closures, to Experian, TransUnion, or Equifax.3Consumer Financial Protection Bureau. Will It Hurt My Credit if My Bank or Credit Union Closed My Checking Account
The damage, when it happens, comes from how you close rather than the closure itself. Involuntary closures tied to unpaid debts or suspected fraud get reported to specialty agencies like ChexSystems, where the record can sit for five years and lead other banks to deny your next account application.6ChexSystems. ChexSystems Frequently Asked Questions If a collector picks up a leftover balance, that account can land on your regular credit report and weigh on your score for up to seven years.
Prep That Prevents the Indirect Costs
The fees that catch people off guard are rarely the bank’s own. They come from automatic payments bouncing off a closed account. A missed loan or credit card payment that runs 30 days or more past due because the charge hit a dead account can hurt your credit score, and billers may add late or returned-payment fees of their own.
Before you close, list every recurring payment and every direct deposit tied to the account. Move each one to the new bank. The FDIC recommends planning several weeks ahead because setting up new direct deposits and updating billers takes time to finalize.7FDIC. Thinking About Moving to Another Bank Keep a small balance in the old account during the transition so any stragglers don’t bounce, and watch the account for at least one full billing cycle before you shut it down.
Request written confirmation that the account is closed, and destroy any debit cards or unused checks tied to it.
Special Situations
On a joint account, most banks let either owner close it alone, though some require all parties to consent or be notified. Call before you go in.
Closing an account after the owner has died is a different process, not a cost question. You’ll likely need a certified death certificate and, for accounts in the deceased person’s name alone, letters testamentary or a small estate affidavit depending on the state. A power of attorney generally terminates at death and won’t work for this.
Two Things That Still Reach You After Closure
If the account earned $10 or more in interest during the year you closed it, the bank is required to send a Form 1099-INT reporting that income to you and the IRS by January 31 of the following year.8IRS. Instructions for Forms 1099-INT and 1099-OID Make sure the bank has your current mailing address when you close so the form actually reaches you. You owe tax on that interest whether the form arrives or not, so keep your own record.
If the bank mails you a check for the remaining balance, cash or deposit it quickly. Every state has unclaimed property laws requiring banks to turn abandoned funds over to the state after a dormancy period, typically three to five years for bank checks. You can still reclaim escheated money through the state’s unclaimed property office, but it’s a slow process you don’t need.