Closing a bank account can seem like a daunting task, but it's actually quite simple.

In this post, we'll show you how to close your account and explain the process step-by-step. So if you're ready to move on from your current bank, keep reading!

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Things you should do before closing a bank account

Make closing a bank account as smooth as possible by:

Opening a new bank account

Before you close your existing account, make sure you have set up a new bank account with another bank to receive your money, unless you plan to live off grid. If you close an old bank account before selecting a new bank, you may find yourself inconvenienced when you have to pay bills or transfer funds.

Finding a new bank may appear tough, but it is not. Here are three tips that will make your search easier:

•  Look for a bank that charges low or no fees – There are many banks out there that charge low or no fees, so there is no point in sticking with on that charges a hefty fee for almost everything. If your employer has set up direct deposits and you are tech-savvy, consider a digital bank. Because these banks have much lower operating costs than traditional banks, they charge fewer fees.

• ConsiderATM location convenience – Do you typically pay with a card or withdraw cash from ATMs? If it is the latter, check whether you will have access to a convenient bank-owned ATM. Other things to take into account include the availability of mobile banking, online banking, and branch location convenience.

• Selecta bank that suits your lifestyle – It is important to pick a bank that meets your needs. For instance, as an entrepreneur, you will want a financial institution that can support your business as it grows. On the other hand, if you are a salaried employee and looking to save as much money as possible, you may want a bank with features such as an online budgeting tool or an ability to open different savings accounts for different things.

You will need to show a proof of identity to open a new account. A valid passport or a driver’s license work best, but if you do not have either of those, any of the following documents will also do:

• Birth certificate

• SIN card

• A citizen certificate or a naturalization certificate

• Permanent Resident card

Switching all recurring payments

If you have set up recurring payments, review and transfer them. Generally, all you have to do is enter the new account number and routing number in the place of the old ones. Review your last few statements to determine which automatic payments need to be rerouted. These may include direct deposits, automatic fund transfers, bill payments, and rent payments.

Transferring money to your new account

Try to do this the same day you close your bank account. Otherwise, your bank may charge you a minimum balance fee.

Informing your bank

Depending on your bank and type of account, you may be able to close it online, by calling customer care, by mailing a written request, or in-person at a branch. When closing in-person, it is a good idea to carry an ID-verification document with your photo on it, like a passport or driver’s license, as you may be asked to confirm your identity.  

How do you close your bank account

Most Canadian banks allow their customers to close a bank account in multiple ways. Generally, you pay a fee when your account balance is below the minimum and when you ask the bank to transfer your funds to another account. Some banks may also charge you a fee if your account is dormant.

TD Bank Account

There are three ways you can close your TD bank account. You can close it by visiting the nearest branch. If you have emptied your account, you can close it by calling customer support at 1-888-751-900 or via Online Banking.

TD Fees

• If your account requires a minimum balance, and you have not maintained it recently, the bank will charge you non-sufficient funds fee of $48.00

• TDBank considers an account dormant after one year of inactivity

• You pay a fee of $15 if you ask TD Bank to transfer funds to another bank account. If you do this yourself, there is no fee.

RBC Bank Account

You can close bank accounts with RBC by visiting your local branch. Alternately, you can close it via online banking or by calling customer support at 1-800-769-2511.

RBC Fees

• RBC does not charge you a fee when you close an RBC account within 15 days of its opening

• You pay a fee of $20 if the account is older than 15 days. However, in-person closing of RBC bank accounts is free, regardless of how old they are

• If your account requires a minimum balance, and you have not maintained it recently, the bank will charge you non-sufficient funds fee of $45.00

• RBC marks an account as dormant if it has been inactive for a period of 2 years

Scotiabank Account

There is only way to close a Scotiabank account: by visiting your local branch. Scotiabank does not allow its clients to close bank accounts over the phone or online.

Scotiabank Fees

• You pay a fee of $20 if you close within the first 90 days

• You pay a fee of $20 if you ask Scotiabank to transfer the funds to another bank

• If your account requires a minimum balance, and you have not maintained it recently, the financial institution will charge you non-sufficient funds fee of $48.00

• Scotiabank considers an account dormant if it has been inactive for 12 months

BMO Bank Account

You can close a bank account by visiting your nearestBMO branch. You cannot do it online or over the phone.

BMO Fees

• You pay a fee of $20 if you close within 90 days of account opening

• You pay a fee of $20 if you ask BMO to transfer the funds to another financial institution

• If your account requires a minimum balance, and you have not maintained it recently, the bank will charge you non-sufficient funds fee of $48.00

CIBC Bank Account

Visit your nearest CIBC branch to close your account or call customer service at 1-800-465-2422.

CIBC Fees

• You pay a fee of $20 if you close a bank account within the first 90 days

• You pay a fee of $19.50 if you ask BMO to transfer the funds to another account

• If your account requires a minimum balance, and you have not maintained it recently, the bank will charge you non-sufficient funds fee of $45.00

• Your CIBC account will become dormant after two years of inactivity

Tangerine Bank Account

You can call customer support at 1-888-826-4374 or use online banking to close a bank account.

Tangerine Fees

• If your account requires a minimum balance, and you have not maintained it recently, the bank will charge you non-sufficient funds fee of $45.00

• You pay a fee of $10 if you don’t initiate any transaction for 1 year

HSBC Bank Account

You can close your HSBC bank account by visiting the nearest branch. Alternately, you use online banking or call customer support at604-525-4722.

KOHO Account

Contact KOHO support through their app to close a bank account.

KOHO Fees

• KOHO does not charge any fee for closing an account

• Accounts that are more than 13-months-old and have been inactive for a period of 6months are charged $1 every 6 months. You can avoid paying this fee by initiating at least one transaction every six months

Wealth simple Account

You can close a Wealth simple account online by browsing to their website. However, first withdraw funds to a linked account, cancel any auto-deposits or schedule transfers, and turn off Overflow orRoundups.

Simplii Account

You can close a Simplii account over the phone by dialing 1-888-723-8881.

Simplii Fees‍

• You pay a fee of $19.50 if you ask BMO to transfer the funds to another account

• If your account is dormant, you pay an annual fee of $20. An account becomes dormant if it has been inactive for 2 years  

Does closing a bank account impact your credit score?

The actual closure of bank accounts does not affect your credit score. But your credit score may take a hit if your account has an outstanding balance.

Your bank account information will not be reported to the credit reporting agencies. So, this information is absent from your credit report. And what is not in the credit report, cannot impact the score.Therefore, the actual bank account closure has no bearing on your credit score.

However, you could be in trouble is if your bank account had a negative balance when it was closed. If your bank decides to transfer this debt to a collection agency, it can show up on your credit report. A collection account can considerably hurt your credit score — and will do so for a few years.  

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What happens after closing your bank account

Closing a bank account does not affect your credit score if your account is not in red. And if you have updated all the pre-authorized payments, you will be able to escape the $45-$48 NSF fee that most banks charge. Before closing a bank account, make sure you have transferred all the funds to another account. If you do this yourself, you do not pay any fee. But if you ask your bank to do the same for you, they are likely to slap you with a fee of $15 to $20.

Closing a bank account is not difficult at all. In many cases, you can do it with a few clicks or by calling the customer support if your account has zero balance.Alternately, you can visit the nearest local branch. You may be asked to show a photo ID, so do not forget to carry it along.

Conclusion

So there you have it, our guide to closing your bank account from any company. We hope this was helpful and that you are now ready to take the plunge and close your account. Let us know how it goes!

Common FAQs

What happens to my outstanding checks when I close my bank account?

When you close your bank account, any outstanding checks will be returned to the payee. The payee will then need to contact you to arrange for payment.

How long does it take to close a bank account?

It usually takes about two weeks to close a bank account. The bank will first need to process your request and then send you a confirmation letter. Once you receive the letter, you will need to take it to your local branch and show ID. They will then close your account and issue you a check for any remaining balance.