Many people struggle with the question as to how they can close savings account. They want to know how they can close their savings account. There are many things to consider before and while you close your savings account. This article will tell you all the things that you need to know regarding this.
People generally close their savings account, when they want to transfer their money to another bank account or when they are switching banks. Although, a savings account is a great convenient tool, your relationship with the bank can go wrong, due to which you want to close your savings account there. In such a case, you may want to open your savings account at some other financial institution.
Many people also close savings account, as they want to open an online savings account, which offers higher yields and better interest. They may also want to do so because online savings accounts work great as emergency funds and are comparatively easily accessible for money.
Some considerations to close savings account
Before closing your savings account, you must consider a few things, including the automatic payments and deposits. For this, you need to check your monthly statements in order to see any automatic payments for your account. If there are automatic payments for your account, you need to contact your retailers and vendors, so that they can arrange some other payment mode.
If you close your savings account without doing this, then you may miss your payments, which in turn will show on your credit report and affect your FICO score. And, if you do this, the direct deposit set up will also end. This means that your employer will be notified about the closing of your account and you will get a live check. Also, you must plan ahead, as you may get the money after some time. You can get your paycheck through mail at your home or directly at work.
Moreover, many banks ask depositors to keep a minimum amount of money in their savings account. And, if the depositors do not do this, then they can incur penalties and fees. Even when you close savings account, due to the time between the withdrawal of funds and the real closing of your account, you may incur fees. In such a case, your savings account will get an overdrawn status, which will further reduce your credit score or even given to collections. If you do not want this, then you should pay the required fees.
Some things to know to close savings account
By keeping the above mentioned things in mind, you can close your bank account. After determining, whether there is a minimum balance requirement or not, you can withdraw or transfer your remaining funds from your savings account. Note that a saving account with a negative balance cannot be closed.
Moreover, different banks have different requirements, when it comes to closing their savings account. Some banks require you to go to their local branch in order to close the savings account as well as to confirm your identity. They may even ask you the reason as to why you want to close savings account. Generally, banks ask the consumers to give it in writing to close their account. When you do this, ensure that you sign the request and specify the place where you want to send your remaining funds.
If you want to verify that your savings account has been shut, you can try to log into your account’s online banking or access through its ATM. If you have a debit card, you can use the latter method. In such a scenario, you cannot use your password, PIN number, and your user name to access your savings account, if it has been closed.
So, keep these things in mind when you close savings account. This way you can close it without any hassles or paying any penalties.