Most banks usually allow their customers to open and close accounts, but there may be hidden procedures in the agreement letter which is printed in small letters. The challenge of closing an account at a bank is that so many deposit and withdrawal services run automatically. Another issue is the potential for hidden costs or additional problems. You must prepare your bank account carefully so that it can be successfully closed and avoid potential problems with your finances.
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Method 1 of 3: Preparation Before Closing Account
Step 1. Decide on the banking experience you want
Most traditional banks have online and physical service locations. However, some new financial institutions offer only online banking services. Take the time to study the sources and offerings available from the different banks.
- Banks with branch offices in physical buildings are a more convenient option for you to get services from bank staff and have a physical location to deposit and withdraw your money.
- Online banking may be a more efficient option, especially if you have experience with online banking and are used to performing various financial processes electronically.
- Consider non-traditional options, such as cooperatives, mutual fund savings, and fund management accounts.
Step 2. Evaluate your financial habits and cash needs
Pay particular attention to bank transfer fees, interest charges, and your personal financial expenses, so you can decide which financial institution is best for your financial management style.
- Consider the different types of accounts you might need and whether the bank offers other benefits, such as linking checking and savings accounts.
- Know the transaction fees and the location of the bank's ATM to ensure that you can pick up cash when you need it.
- Most banks require new customers to save at a certain minimum balance, so make sure you have enough cash on hand.
Step 3. Open an account with a new financial institution
Some banks even offer financial incentives when customers open accounts, such as cash bonuses. Automatic payments, automatic clearing receipts, and bill payments should be fully operational at this new financial institution, so you avoid incurring additional costs.
- Record the bank account number and routing number of your main account at the new bank.
- Have access to online banking services with your new bank account, if possible, to give you direct access to your banking information and transactions.
Step 4. Ask your company to change your account number data to a new one
Make changes to the automatic clearing beneficiary account data by filling out the required forms for all companies or clients who paid for your work/services since the previous year.
- If you receive non-routine payments through an automated clearing process from a company/client, you should play it safe and ask that company/client to update your account data. Clearing deposits that go into a closed account require the bank to reopen your old account.
- Remember to move any other automated transactions, such as automatically debited payments.
- Change the bank account data linked to your electronic account (for example, PayPal), if you do use one.
Step 5. Change the data or stop the withdrawals that keep occurring in your old account
Many banks reopen closed accounts if there is a clearing request, and you will usually be charged an overdraft fee if clearing occurs when your account balance is empty or minus.
- Payments for health insurance, rent and other routine needs usually go through a clearing process.
- Review your bank statement from last year to determine what automatic payments are reducing your account balance.
Step 6. Ask your old bank to remove any ongoing bank services from the old account
Failing to stop these services will result in you incurring various automatic fees, even if you have closed the old account.
- As a term and condition of identity abuse insurance, automatic tax transfer, or various other services, you are required to cancel each of these services individually.
- Always keep in mind any automatic fund transfers you've made, such as transferring funds to an external savings account, namely your savings account.
Step 7. Wait for 30-45 days to ensure that each automatic transaction has been transferred to a new bank account
Any organization that uses an automated clearing service requires a waiting process that can take up to 30 days, and some take even longer to do this process. Waiting will save you from additional costs if you miss any automated transactions.
- If you close a deposit account or money market account, you will be charged withdrawal fees and account closing within 6 months to 5 years. The duration of time for keeping funds in accounts like this requires a commitment, and if violated you will lose the interest you have earned as well as the fees charged.
- As a safety measure, allow a small amount of funds to settle in your old account to pay for repeated transactions that you forgot to pay or checks that were overdue.
Method 2 of 3: Transferring Funds
Step 1. Check the balance of the account you want to close
You should know how much money you have in your account before starting this process. Download and print bank statements from your online account.
- If you believe you have a pending payment or a check that hasn't been cashed, wait until your monthly financial cycle ends before checking your balance.
- Keep this document for your records, in case you have questions or problems in the future.
Step 2. Confirm that you can move the funds
The financial authority in your location may have a maximum limit for transferring money per month from a savings account or money market account. Your bank may also have a maximum nominal limit for transferring funds or withdrawing funds from each account type specifically.
- Call the bank's customer service number on the back of your ATM card to find out the rules and conditions. You can also look up your bank's customer service number on the internet.
- Transfers of funds between the same bank account are also included in the maximum frequency and nominal limit of the transaction, so avoid transferring funds before closing your account.
Step 3. Contact your bank to find out more about applicable fund transfer procedures
You may be able to find this information online, but it is wise to verify the information by calling customer service. Each bank has different rules and requirements regarding the transfer of funds from your account, especially if you wish to empty it.
- Some banks that only provide online services allow electronic fund transfers at no charge.
- The amount of money you move will have an impact on the process, so make sure that you have the correct information about your entire situation.
Step 4. Decide how you will move your funds
Check with your bank for information about this procedure to decide whether you need to transfer funds electronically, by contacting customer service or visiting the bank's branch office. Visiting the local branch office is the most trustworthy option.
- If you are moving funds to a bank branch, you will need your account number, bank code number and routing number for your new account. You will usually be charged based on a percentage of the amount transferred by your bank.
- Make sure that you bring your ID card, in order to prove your personal identity.
Step 5. Ask your bank to issue a check for you
Make sure that you can prove the balance in your account, then ask for a check for the balance in your account. Have the bank mail a check to your home address, with the required signature confirmation to keep it safe.
- Many banks only issue a type of cashier's check for this purpose. If so, there may be a fee charged to you for issuing the check, for example IDR 250,000.
- Personal checks from your account may cost less, but cashier's checks are cashed faster.
- Some banks offer transfer services using the wire transfer method, but usually the fees are more expensive.
- If you move from one online bank to another, you should be able to move funds electronically without a physical check. However, you may experience delays in sending money to your new account.
Step 6. Confirm that you have canceled all bank services associated with the old account
Perform a final check to ensure that all fund transfers, payments and automated services have actually been carried out or transferred.
- Consider asking for confirmation by email or letter from the bank teller or customer service staff.
- If your bank only provides online services, check your account details.
Step 7. Put your check into the new account
When your funds arrive, it is important to have direct access to them. Be very careful with your new account, and make sure that you check it online or call your new bank's customer service department to confirm that your money is in and in the account, and can be used.
Method 3 of 3: Closing Account
Step 1. Check your old account to make sure it's empty
Once there is no money left, you can close your account. You need approval from all account holders to do this, so ask anyone on the account holder list to go to the bank's branch office with you or ask them to give their approval over the phone.
- Use online banking services or contact customer service, to check your account balance.
- If your last withdrawal was marked “Pending”, note the date of the transaction, then check again.
Step 2. Understand the procedure for closing an account at your bank
Since banks have different terms and processes, take the time to make sure you understand your responsibilities, to avoid unnecessary trouble.
- Most banks don't allow online account closing, so be prepared to call customer service or visit your local branch.
- Some banks require filling out a special form or letter that must be signed by a notary.
Step 3. Request proof that your account has been closed
You should receive an official letter indicating that your account has been closed, but it's best if you specifically request it. This letter will arrive within 5-10 business days.
- If you do not remove funds from your balance before closing your account, you should also receive a check for the remaining balance in your account.
- Contact your bank if you have not received the account closing document within 5-10 working days. If this letter hasn't arrived, there may be a problem with your account and it's still not closed.
Step 4. Cut and destroy all debit cards and account books or checkbooks associated with your previous account
Removing all of these accesses will help you avoid accidental use or potential fraud.
Step 5. Watch your two accounts for the next 30 days
Ensure that automatic clearing, bill payments, other credit and debit transactions are now in and out of your new account. Mistakes that usually occur will make the closing of your account delayed from the time it should be.
Warning
- Be aware that each bank requires filling out a different form as a condition for closing an account. Call the bank's customer service department and ask if you can close the account via online, mail, telephone, or have to come in person to the bank.
- Do not close your newly opened account before the 90 days have elapsed. Many banks charge a fee of IDR 250,000-IDR 500,000 to close a newly opened account (not past the first 3 months). Some banks charge this fee even if your account is less than 180 days old.
- Not all banks automatically close empty accounts, so be sure to follow the account closing procedure after you have transferred all your funds.
