Closing Bank Account – What You Need to Know!

It could be difficult to close your bank account if you don’t have proper knowledge. The inconvenience, time, and associated fees with it scare away numerous customers. A prepared strategy, on the other hand, makes the procedure less scary. 

Many customers want to deactivate accounts on the spur of the situation. However, it is a pleasing demonstration of customer choice that may result in much more inconvenient situations.

You can assure a successful transfer and avoid a lot of difficulties by following the appropriate procedures when changing banks. This article is about closing your bank account.

It’s a complete guide that will assist you in closing a bank account safely. To close your bank account, follow these steps: 

How To Close a Bank Account

Closing a bank account is not hard, but you really should know why and how. Closing a bank account can be done for a variety of reasons.

Else, if you are interested in taking personal loans then learn what are their pros and cons.

You may be relocating to some other nation, or you may have discovered a bank with cheaper rates, or you may have outgrown the bank account your family opened for you when you’re a child. Perhaps you simply dislike your bank.

It is straightforward to close a bank account. Set up any approval before first, such as life insurance products or loan repayments. 

Carry out the same procedure for your bank transfer. Then, alternatively, remove all of the money from the bank account you would like to cancel, or move it digitally or by paying cash to yourself. 

Contact your bank, go in people, or write a message to the branches to terminate the accounts. To render the transaction legal, your bank will try to sign an accounts closure form.

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If you don’t remove the money initially, your client will give you a check once the account has been terminated.

Procedure For Closing Bank Account

Closing a bank account is simple, you must follow procedures to ensure that everything goes well. You may incur fines or have your payment postponed if you skip key stages.

• Sign up for a new bank account. This should ensure that you have somewhere to send money and earn rewards.

• Make a payment method to your current card. Since some banks pay extra if your checking account becomes too small, try and close the accounts the same day.

• Change the bank account for all regular billing. Find out how to change banks in this article.

• Verify that any current payments, including checks and digital debit card transactions, have passed.

• Change the account for your bank transfer.

• Inform your previous bank if you wish to lose your money.

• Closing bank account letter regarding closure is very important before you terminate your account. Complete the account closure paperwork and sign it.
• A registrar ought to be accessible at your checking account union designated place if you need it certified.

• Be sure to keep track of everything. Ensure that you receive written proof of the account’s termination.

This is how to close a savings account.

What Happens When You Close A Bank Account

Whenever it comes to canceling your account, many banks prefer to ensure that the balance is zero before proceedings. If you do have money in your account, you can withdraw it, move it, or even have the bank withhold prices to pay its expenses.

Matter which option you choose, your account should indeed be closed with a zero balance to guarantee no abandoned monies were hanging around from the financial system.

Finally, each bank does have its account closing method, which you will double-check to yours.

RBI Guidelines For Closing Bank Account

The Reserve Bank of India (RBI) has no set standards for closing charges, so they are completely in the hands of the bank, as are many extra fees. The RBI, on the other hand, has advised banks to assure those bank customers with a limited amount of activity are not punished when setting costs.

To close a bank account, go to your bank’s local station with your valid ID, check, and direct debit (if applicable). You must fill out the accounts termination report and fill it for cancellation there.

How To Close A Bank Account Without Going To The Bank

However, when you’re unable to register and log in due to sickness or health reasons, you may send any person with an authorized signatory and his valid ID, as well as a legally signed Account Closing Form, direct debit, and accounts cheques.

Will A Closing Bank Account Credit Score Be  Affected?

Your credit rating is unaffected by closing a banking activity or a time deposit. It may be a different situation if you terminate an excess account.

Your credit rating is determined by credit inquiries, including how much cash you’ve drawn, how many account statements you’ve done lately, or even whether you make your taxes and mortgage payments on time.

How Much Does It Cost To Close A Bank Account

You will be charged by the bank if you pay your bill within a certain time frame. People are wailing these times about bank fees, particularly current mean balance service charges. 

However, did you know that if you take your money within a certain time frame, your bank would penalize you? Account closing penalties are often imposed by the banks if the payment was made in a year. 

Checking account closing fees is what they are called. SBI’s credit card closing fees were recently updated. 

The increased fees will take effect on October 1st. Customers of SBI will no longer be charged account closing fees if they close their bank account after a certain period has passed.

Previously, if a customer canceled their savings account after that year, the bank would charge them $7 GST (goods and services tax). Those few who close their bank account within the first year of it being opened would be charged and over $7 in GST. 

For such clients, no changes have been made. But, if a dead person’s account is canceled, there would be no charges, whereas previously, the bank might charge $7 or even more GST in these kinds of circumstances. 

In addition, there would be no cost if a recurring deposit bank account owner’s no-frill account closes their account when previously, there were costs of further than $7 GST.

If a customer closes a checking account after 14 days after establishing it, the bank does not levy any fees. 

If the account is canceled after 14 days, the penalties are 14 dollars GST. Account closure fees, which typically range from $7 to $14 GST, are imposed by all the other banks. According to Adhil Shetty, CEO and Co-founder of Bankbazaar.com, “many banks apply account termination charges to recuperate the expense they spend while setting up an account in terms like equipment, checking account, direct debit, etc.”

Final Words

So this was all about closing bank account. Remember that before you close your bank account you should read all the instructions carefully.

Different banks offer different guidelines so double-check with yours. To terminate an account, some firms allow you to write a note or communicate with customer support electronically, whereas others demand you to phone.

So it is better to go yourself to the bank and do clearance before closing your bank account.