How to close a bank account

We are going to tell you what you need to keep in mind so that you can close you bank account hassle-free

In many cases a bank account is opened for a specific purpose: to save money to buy a car, to make mortgage payments to a particular financial institution, to share expenses for an apartment with roommates, etc. Once an account's purpose has been fulfilled, however, many customers will decide to close it for reasons of both convenience and peace of mind. In other cases, a checking account may be closed because the account holder has died or has experienced a change in employment status (no longer receiving salary payments), for example.

The process used to close an account is simple enough and should not present any problems, although it is also important to understand some of the other implications that may be involved and that should not be overlooked. Although as mentioned above this procedure should be fairly simple, there are a series of steps that you should first be aware of.

Many people believe that withdrawing all of the money from an account (leaving a balance of €0) will cause the account to be automatically closed for lack of activity or lack of funds. However, this is not correct. It is important to find out the specific procedures used by each financial institution for closing a checking account.

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Requirements and documentation

1. Signature and National ID Document (DNI/NIE/NIF in Spanish) of the account holder(s) of the checking account

The first step to take in order to close a bank account is to determine whether there is just one account holder or more than one, because consent must always be obtained from all of the account holders. If the bank where the account is held does not offer an online service for closing an account (via the Internet), or else some other remote means (by postal mail, telephone, fax, etc.), the account holders must visit their branch in person in order to present a valid identity document and sign the document authorizing closure of the account. At some banks this must be done at the same branch where the account being closed was initially opened.

- If an account holder dies:

If one of the holders of a bank account has already died, the legal heirs must be the ones to carry out this procedure, by submitting the documentation required by the bank (among other documents, the death certificate and the official document showing evidence of the inheritance).

2. Return of cards, checks and passbooks

Before the account is closed, the customer must return or destroy all credit and debit cards, checks, passbooks, and other means of payment associated with the account.

In some cases the bank will request that the account holders should visit a branch in order to return all of these materials. This is a security measure.

Recommendations

Before closing your bank account by signing the closure document:

  • Make sure that there are no bills still being paid from the account by direct debit.
  • Notify any parties that are making payments into your account that the account is being closed (such as your employer or anyone else making periodic payments for some reason).
  • Make sure that the checking account you are closing is not being used to deposit interest earned by other financial products (term deposits, savings accounts, etc.), whether you have these at the same bank or at some other financial institution.
  • Delete your account number and/or associated card number from any e-commerce or online payment sites where you may have previously used them. This will help avoid problems when making your next purchase or when subscriptions are being renewed, etc.
  • Make a backup copy of the records for your account. With many banks, the easiest way to do this is to download your account records from the Internet, using the private customer area at the bank's website.
  • Finally, we recommend that you should ask for a document showing evidence that you have closed the account, just in case you may need this later in relation to some sort of claim.
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Fees or penalties

Some banks may charge a fee or penalty for closing your checking account. However, in addition to this possibility you must also take into account:

  • Negative balance: If the account you want to close has a negative balance, you will first have to make a deposit to cover this amount before the account can be closed.
  • Account management or maintenance fee: If the account you are closing charges fees for administration and maintenance, the amount due will be pro-rated based upon the closure date for the account.
  • Promotions: If you have taken advantage of any promotions or received any other benefits for opening or maintaining the account you now want to close, and if the time period you needed to maintain the account in order to be eligible for these has not yet passed, you may have to pay a penalty for violating the terms of the promotion. To be certain about this, you can find more information in the legal terms and conditions issued for the specific promotion, or else at your local branch.
  • Mortgage, credits or any kind of loan: If you have any sort of outstanding loan or credit with the bank and the account you want to close is the one used to make payments on such products, you must first find out whether it will be possible to close the account anyway, or to make your payments from an account at another bank, and also whether there will be any type of penalty applied for doing this.
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