How to close a bank account

Closing a bank account is usually a fairly straightforward process. But there are some things to be aware of if you want to make the process as smooth as possible.

Perhaps you’ve decided to switch banks to take advantage of better interest rates or features. Or maybe you’ve had a relationship change and you want to combine accounts, or open separate ones. For whatever reason, if you have decided to switch banks, you may want to close your old bank account. Aside from contacting your bank, there are a few other steps you should take.

Steps to close a bank account

1. Open a new bank account (if you need to replace the one you’re closing)
2. Stop your direct debits
3. Contact your employer and anyone else who sends you money
4. Transfer your money
5. Contact your old bank to close your account.

1. Open a new bank account

If you need to open up a new transaction account or savings account, start by comparing your options. You might want to look for a transaction account with no monthly account keeping fees. You could also consider checking what interest rate is available on the savings account and whether it is competitive, how easy it is to access your money, and any other features that may be useful for your own saving and spending behaviour. Once you’ve found an account that suits you, you can usually open a new account online or at a branch fairly quickly.

2. Stop your direct debits

Cancel any direct debits or recurring payments from your old bank account. This could include payments such as your rent or mortgage payments, phone bill, internet bill, loan payments, gym membership and streaming services. You’ll then need to move those direct debits over to your new account. If you have a PayID linked to your old bank account, you can also transfer this to your new account.

3. Contact your employer and anyone else who sends you money

The next step is contacting anyone who regularly sends you money and notifying them of your new account. This could include the payroll department at your place of work, Services Australia if you receive government payments and your share trading provider if you have shares and receive dividends.

4. Transfer your money

You then need to transfer money from your old account into your new one. Depending on the amount of money you are transferring, you may need to increase your daily transfer limit. You can usually do this through internet or mobile banking or by calling your bank.

You may want to leave a small amount of money in your old account in case you have forgotten anything. This could help you avoid missed payment fees or overdraft fees. You could also ask your bank for a list of direct debits and credits for peace of mind.

5. Contact your bank to close your account

You can now close your bank account. You can usually close your account online through internet or mobile banking, or by calling your bank or visiting your local branch. It’s worth checking the specific requirements with your bank. For example, some banks ask you to return any unused cheque books or cards.

If you are closing a joint account, Moneysmart advises that both account holders will need to agree to close the account and both may need to be present when contacting the bank. The process may also be a bit different if you are closing the bank account of a deceased person.

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