Key takeaways
- Several banks charge an early account closure fee, usually between $5 and $50, if a customer closes their account within 90 to 180 days of opening it.
- Customers often choose to close their accounts early if they find better fees, higher annual percentage yields, or more convenient services at another bank.
- Many banks and credit unions don't charge early account closure fees, but it's important to research a bank's policy before opening an account.
No one enjoys seeing pesky bank fees eat away at a savings or checking account balance, so it can pay to shop around for an account that doesn’t charge maintenance fees, out-of-network ATM fees or overdraft fees. Another fee charged by some banks is an early account closure fee.
Various banks and credit unions have policies of charging such a fee if a customer closes an account within a set amount of time after opening it. If you think for any reason you might need to close an account soon after establishing it, it’s a good idea to see if the bank will charge you a fee for doing that.
What is an early account closure fee?
An early account closure fee is a predetermined amount of money — usually between $5 and $50 — that the bank will charge you for closing your account soon after opening it. Of the banks that charge this fee, many will impose it upon customers who close their accounts within 90 days of opening. Other banks, however, require you to keep the account open for up to 180 days to avoid the fee.
You can find out whether a given bank charges an early account closure fee by looking at the bank’s fee schedule, which is often relatively easy to find when you’re on the bank’s website.
Early account closure fees at popular banks
Whether they’re big banks, online banks or community banks, many banks these days don’t charge fees for closing accounts early. However, there are some banks and credit unions that will assess such a fee to customers — often when the account is closed within 90 to 180 days of being opened.
| Bank | Account(s) | Early account closure fee | When fee is assessed |
|---|
| Alliant Credit Union | Various deposit accounts, where permissible by law | $10 | If account is closed within 90 days of opening |
| BMO Harris | Various checking and savings accounts | $50 | If account is closed within 90 days of opening |
| Huntington National Bank | Various deposit accounts | $20 | If account is closed within 180 days of opening |
| Personal checking accounts (excludes MyWay Banking accounts) | $50 | If account is closed within 180 days of opening |
| Popular Direct | Various deposit accounts | $25 | If account is closed within 180 days of opening |
| Regions Bank | LifeGreen Checking | $25 | If account is closed within 180 days of opening |
| Security Service Federal Credit Union | Various deposit accounts | $5-$25 (depends on account) | If account is closed within 90 days of opening |
| Zions Bank | Various deposit accounts | $25 | If account is closed within 90 days of opening |
Why do banks charge early account closure fees?
A bank incurs administrative costs each time a customer opens an account, whether the account is opened online or by a customer visiting a branch. Banks might not recoup such costs if a customer closes their accounts within a short period of time.
Charging a fee to anyone who closes an account soon after opening it helps ensure customers will stick around, which often also means they’ll continue to make deposits and earn money for the bank.
Reasons people close bank accounts early
Some consumers decide to close a bank account soon after opening for various reasons:
- They find an account with another bank that pays lower fees or a high annual percentage yield (APY).
- Another bank has better branch availability or hours of operation.
- They want certain banking features or products not offered by their current bank.
- They move to a new area where their current bank doesn’t have branches.
- They’re opening a joint account and closing their sole-ownership account.
How to avoid early account closure fees
You can avoid early account closure fees by researching whether a bank charges such a fee before you open an account there. Be aware of how long you’ll need to keep the account open to avoid being charged the fee.
Plenty of banks don’t charge early account closure fees, so it’s worth finding such a bank if there’s a good chance you’ll be closing the account or switching banks in the near future.
Bottom line
Many people keep their bank accounts significantly longer than just a few months, yet it’s worth researching a bank’s early account closure policy if you feel you might be closing yours a lot sooner. While many banks and credit unions don’t charge such a fee, others may charge between $5 and $50 to customers who don’t hold onto their account for more than a few months.
– Bankrate’s Rene Bennett contributed to an updated version of this article.
FAQs
An early account closure fee is a predetermined amount of money — usually between $5 and $50 — that the bank will charge you for closing your account soon after opening it.
Do banks charge a fee for closing an account? ›
Is there a fee to close a bank account? Generally, no. The main exception is if you close an account shortly after opening it. Some banks and credit unions charge what's called an early account closure fee that kicks in if you close an account within a time frame such as 90 or 180 days.
Are there any bank account closure charges? ›
Note that banks usually levy account closure charges ranging between Rs 500 to Rs 1,000 in case a current account is closed after 14 days. Keep in mind, the Reserve Bank of India (RBI) does not have any specific guidelines on closure charges. Hence, levying service charges depends totally on the bank's discretion.
Does Wells Fargo have an early account closure fee? ›
How much does it cost to close a Wells Fargo account? There is no charge to close a Wells Fargo account. Again, be sure that your account is not overdrawn—zero or positive balance—and there are no pending deposits or outstanding legal claims or disputes. If you want to send money overseas, Wise can be a great option.
Do you get penalized for closing a bank account? ›
Closing a bank account that's in good standing won't hurt your credit score. If you have a negative bank balance, however, it's important to resolve the balance before closing the account.
Does account closure affect credit? ›
The act of closing a bank account, such as a checking or savings account, does not directly affect your credit score. Your credit score is not directly affected by your checking and savings account activity. That includes account closures.
Does closing a bank account hurt you in any way? ›
The mere act of closing a bank account doesn't have a direct impact on your credit. The Consumer Financial Protection Bureau confirms that the three major credit bureaus — Experian, Equifax and TransUnion — don't typically include checking account history in their credit reports.
Why do banks charge a closing fee? ›
These costs come about through the process of creating your loan. Closing costs cover the fees for services like your home appraisal and searches on your home's title. The specific closing costs you'll need to pay depend on the type of loan you borrow and where you live.
Can you negotiate closing costs with the bank? ›
A highly motivated seller may be persuaded to pay some of your closing costs, especially in a sluggish market or when the house has been on the market for a long time. You also may be able to negotiate with your lender and other parties to get some fees reduced or waived entirely.
Can a bank refuse to close a bank account? ›
How can the bank refuse to close my overdrawn checking account, as I requested, to avoid more overdraft fees? Generally, the bank will not close a checking account that is in an overdraft status. Such an account will be kept open until it is brought current. Then, the account can be closed.
How can you prevent your bank from closing your account?
- Handle checks with caution. ...
- Stay in communication with your bank. ...
- Sign up for alerts and notifications.
Contact Your Bank
Although financial institutions allow you to do this online, they may require you to make a phone call to customer service or a visit to a local bank branch. Some banks and credit unions may require you to fill out an account closure request form or submit a written request.
What is the best bank to bank with? ›
Best-of 2024 Banking Winners:
- Alliant Credit Union: Best credit union.
- Ally Bank: Best bank; best CDs.
- Charles Schwab Bank: Best for ATM access.
- Chase: Best for sign-up bonuses; best for branch access.
- Discover® Bank: Best online banking experience.
Compare the best no-fee savings accounts
| ACCOUNT | STAR RATING | MINIMUM DEPOSIT |
|---|
| Varo Savings Account | 4.7 stars | $0 |
| Affirm Money™ Account | 4.5 stars | $0 |
| Synchrony Bank High Yield Savings | 4.5 stars | $0 |
| Capital One 360 Performance Savings | 4.5 stars | $0 |
1 more rowHere's how you can close your account: Call us at 1-800-TO-WELLS (1-800-869-3557) Visit a Wells Fargo branch near you. If outside of the U.S., complete the Account Closure or Partial Withdrawal Request form (PDF) and send it to us by mail.
Can I close a fixed account early? ›
You may only close a Fixed Rate Bond within 14 days of the account opening, and all funds will be returned to your Nominated Account. After that, Fixed Rate Bonds cannot be closed before the maturity date, as outlined in the Product Specific Terms and Conditions.
How do you avoid account closure? ›
Set up low-balance alerts to stay on top of things. Regularly checking your balance is generally a good financial habit to keep your account out of trouble. Similarly, it's also wise to use your account regularly to avoid a closure due to inactivity.
Is it a good idea to close an account? ›
Closing an account may save you money in annual fees, or reduce the risk of fraud on those accounts, but closing the wrong accounts could actually harm your credit score. Check your credit reports online to see your account status before you close accounts to help your credit score.
What does account closure mean? ›
Any account that has been de-activated or terminated either by the account holder or by the counterparty is known as a closed account. Once an account is closed, no debit or credit transactions can be done through the account.
