5 Things To Do Before Closing A Savings Account | Propertylogy

How To Close A Savings Account Without Future Problems

By on May 29, 2019

It’s almost impossible for any able working adult in the developed world not to have a savings account in his or her own name.

We need it to keep our money safe, convenience in withdrawals, and more importantly to receive our pay check automatically.

However, sometimes for one reason or another, we find that closing one is the only way forward.

This could be due to a growing hate with a particular bank, account being targeted by identity theft, or maybe a bank makes it so difficult to use their services, etc.

Whatever the case, there are some things you should to properly close your savings account so that you do not face any problems in future.

1) Check for monthly payments

One of the things we use savings account most frequently for is for automatic payments towards debt obligations such as the mortgage or auto loan.

So print out the bank account statements for the most recent 3 months and sieve through them looking for such payments.

You don’t want the credit system triggering delinquencies when creditors are unable to collect what they are due. This could wreak havoc on your credit score if left unattended. And recovery can take a while.

On top of that, do be mindful of automatic deductions that occur once a year, biannually or quarterly as well.

Think about the income tax, insurance premiums and subscription services which you have subscribed to.

The IRS for example is not someone you want to offend.

Do make the necessary arrangements to link these payment arrangements to your new accounts before closing your savings account.

2) Does it come with a check book

While check book traditionally come with current accounts, the way banks work these days make it no longer possible to safely assume that a savings account don’t come with a check book.

You need to check whether it is tagged to any of your cheque books because you might have issued checks to people and they have yet to be cashed in.

Postdated checks for example might have been issued which you have forgotten about.

It’s not a good impression to give yourself when the checks you issue to other bounce.

This can hurt your credibility if they are meant to pay for business services.

3) Salary deposits

This is another important task to complete before the closure of any bank account.

If your employer credits your salary automatically into the account, ensure that you inform Human Resource about the account changes.

Failing which can mean huge delays in collecting your pay checks.

On top of that, it tells your HR manager that you are someone who is making a mess of life. This is in addition to the things that they have to do to correct the situation.

It can take some time to resolve such problems.

So if you are tight on cash flow, this can be an excruciating period of time.

4) Is it a joint account?

It’s not as remote a possibility to mistake a joint account for a personal savings account.

After all, joint accounts can authorize one person to do whatever he wants with the account. Even close it.

Accidentally closing a joint account you share with your spouse or family member can be embarrassing.

5) Used as security

Sometimes, funds contained in an account is used as a collateral for other loans.

For example, asset-based mortgages might require borrowers to keep a certain amount of money in a savings account for a specified period of time. If the account has been closed, it can mean a breach of contract or hefty penalty fees.

Do check that the account in question is not linked to any other credit facilities.

Closing a savings account

Once you have run through the above mentioned considerations, closing a savings account is as easy as walking into the bank and requesting for closure.

Remember to bring your identification card. And remember the signature you used.

In the case of a joint savings account with two or more signatories required, the joint account holder must be present as well.

If there is funds still available in the account, the bank would either issue you with a withdrawal or transfer to another account of yours with the bank.

In the event that there is a negative balance, maybe from credit card transactions, then you would have to settle the outstanding owed in order to close the account.

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