You won't be penalized by your bank for closing a checking account, but you may face fees if you close it within a certain window or leave an unpaid balance
Closing a checking account itself is not a penalty. Banks do not report account closures to credit bureaus, and closing an account does not lower your credit score. However, some banks charge an early closure fee if you close the account within a set period—often 90 days to six months after opening it. If your account has an outstanding balance, overdraft, or unpaid fees, the bank will deduct those amounts before returning any remaining money to you.
The real cost of closing a checking account comes from fees tied to how you close it or what you owe, not from the closure itself. Understanding what your specific bank charges and what you owe before you close the account will tell you whether there is money out of pocket.
Key Takeaways
- Early closure fees typically apply only if you close within 90 days to six months of opening the account, and range from $25 to $100 depending on the bank.
- Unpaid overdrafts, negative balances, and outstanding fees will be deducted from any remaining funds before the bank closes your account.
- Closing a checking account does not affect your credit score or appear on your credit report.
- If you owe the bank money after closure, they may send your debt to a collection agency, which can damage your credit.
Early closure fees and when banks charge them
Many banks impose an early closure fee if you close a new account too quickly. This fee is designed to discourage customers from opening accounts for sign-up bonuses and then leaving immediately. The timeframe varies by bank—some charge the fee if you close within 30 days, others within 90 days, and some within six months. A few banks do not charge an early closure fee at all.
The amount ranges from $25 to $100, depending on the bank and the account type. Before you open a checking account, look for the early closure fee in the account disclosure or terms and conditions. If you already have an account and plan to close it, call your bank or log into your online banking portal to find out whether a fee applies and how much it will be.
If you are closing the account after the early closure window has passed, you will not owe this fee. Some banks waive the fee if you maintain a minimum balance or set up direct deposit during the required period.
What happens to money in your account when you close it
When you close a checking account, the bank will settle any outstanding charges first. This means they will deduct any unpaid overdraft fees, monthly maintenance fees, or other charges from your account balance. If your account is overdrawn—meaning you owe the bank money—they will keep enough of your remaining balance to cover what you owe.
After all deductions, the bank will return the remaining balance to you. You can usually choose how to receive it: by check mailed to your address, by transfer to another bank account, or by picking it up in person at a branch. Ask your bank which methods they offer and how long each takes. A mailed check typically arrives within five to ten business days.
If your account balance is negative and you do not have funds elsewhere to cover it, the bank may send the debt to a collection agency. This will appear on your credit report and can lower your credit score.
How closing a checking account affects your credit
Closing a checking account by itself does not affect your credit score. Banks do not report checking account closures to the three major credit bureaus—Equifax, Experian, and TransUnion. Your credit report tracks credit accounts like credit cards, loans, and lines of credit, not deposit accounts.
However, if you close an account with an unpaid negative balance and the bank sends that debt to a collection agency, the collection account will appear on your credit report and will lower your score. Similarly, if you leave an account open with an unpaid overdraft and the bank reports it as a delinquency, that can damage your credit.
To avoid this, pay any outstanding balance or fees before you close the account. If you cannot pay the full amount, contact your bank to discuss a payment plan or settlement option.
Fees that may apply when closing an account
Beyond the early closure fee, several other charges may apply depending on your bank and account status:
- Overdraft fees: If your account is overdrawn when you close it, you owe the overdraft fee. This is typically $25 to $35 per overdraft.
- Monthly maintenance fees: Some banks charge a final monthly fee on the day you close the account or the last day of the billing cycle.
- Wire transfer fees: If you request the bank transfer your remaining balance to another account, they may charge a wire fee, usually $15 to $30.
- Returned check fees: If a check you wrote bounced before closure, you may owe a returned check fee.
Ask your bank for an itemized list of any fees owed before you close the account. This way you will know exactly how much money you will receive and can plan accordingly.
Steps to close your account without owing money
To close a checking account cleanly, follow these steps in order. First, transfer or withdraw all remaining funds from the account. Second, set up direct deposit or automatic payments to your new account if you have one. Third, wait for any pending transactions to clear—this usually takes three to five business days. Fourth, contact your bank to confirm there are no outstanding fees or charges.
Once you have confirmed the account balance is zero and no fees are pending, request closure in writing or through your online banking portal. Keep a record of the closure request and the date. Ask the bank to confirm the closure in writing and to send you a final statement showing a zero balance.
If the bank charged you an early closure fee that you believe was unfair, you can dispute it by contacting the bank's customer service or filing a complaint with the Consumer Financial Protection Bureau (CFPB).
What to do if you owe money after closing
If you close an account and later discover you owed money that the bank could not collect from your balance, the bank may pursue collection. They will typically send you a notice demanding payment. If you do not pay, they may report the debt to a collection agency, which will contact you and report the account to credit bureaus.
If this happens, contact the bank immediately to negotiate a settlement or payment plan. Many banks will accept a partial payment or agree to remove the collection report if you pay in full. Get any agreement in writing before you send payment.
If a collection agency is involved, you have the right to request proof that the debt is valid. Send a written dispute within 30 days of their first contact, and they must stop collection efforts until they provide proof. You can also file a complaint with the CFPB or your state's attorney general if you believe the collection effort is unfair or illegal.
Frequently Asked Questions
Will closing a checking account hurt my credit score?
No, closing a checking account does not appear on your credit report and will not lower your score. However, if you leave an unpaid balance and the bank sends it to a collection agency, that collection account will damage your credit.
Can I close my account online or do I have to go to the bank?
Many banks allow you to request closure through their online banking portal or mobile app. Others require you to call customer service or visit a branch in person. Contact your bank to find out which methods they offer.
How long does it take to receive my money after I close the account?
If the bank mails a check, it typically arrives within five to ten business days. If you request a transfer to another account, it may take one to three business days. Ask your bank for the timeline when you request closure.
What if I forgot about checks I wrote before closing the account?
Checks can clear for weeks or months after you write them. Before closing, make sure all checks have cleared by reviewing your recent transactions. If a check clears after closure, the bank may charge you a returned check fee or overdraft fee. Contact your bank to discuss options if this happens.
Do I need to close my account in person or can I do it by phone?
Most banks allow closure by phone or online. However, some require an in-person visit, especially if you have a large balance or the account has unusual activity. Call your bank to ask what they require.