How to Close a Bank Account & Switch Banks

Closing a bank account can offer many benefits if you choose to move to a better bank. Here are five things you can potentially get when you switch to a new bank account:

The good news is that it is possible to set up a new bank account with a poor or non-existing credit score. However, the types of accounts that are available may be limited. For example, you may not qualify for an account with overdraft facilities or other products that require good credit ratings. It’s also worth bearing in mind that some banks, like Starling, may run a soft credit check when you open a new account.

If you’re overdrawn or in debt and want to close your account, the best approach is to speak to your bank first. Most banks will be willing to negotiate repayment plans, waiving fees or charges associated with the overdraft. However, if you can’t reach an agreement with your bank then you will have to repay the overdraft in full before being allowed to close the account.

When someone passes away, their family or next of kin will normally need to close any accounts that were held in the deceased's name. In most cases, this can be done by submitting a certified copy of the death certificate and other documents to the relevant bank. Different banks and jurisdictions have their requirements for closing these accounts, so it's best to seek legal counsel or contact your bank.

The first step in the process of closing your bank account and switching to a new one is researching and choosing the right one for you. There are different factors to consider when selecting a bank, including;

• Interest Rates: You’ll want to make sure the interest rate offered by your new bank is competitive and beneficial to you. Besides the actual interest rate, you should also look at whether the bank offers any promotional rates that might be more beneficial in the long run. For example, Monzo offers multiple savings accounts, and the interest rate varies based on the term (how long you keep the money saved). Many banks offer similar promotional rates, so it’s worth researching them to see if they can provide you with a better return.

• Fees: Different banks have different fees associated with opening and maintaining accounts, so this is something you should take into consideration when comparing options. Banks may charge fees for certain services, such as using ATMs or international transfers. It’s important to compare the fee structures of different banks before choosing one.

• Location: Depending on where you live and how often you need to access your bank account, the location might be an important factor in determining which bank is best for you. If you prefer having a physical branch near your home or workplace, then it’s worth looking for banks that offer local branches. If you travel a lot, you may need a digital bank that you can access from anywhere. For the best options, visit our collection of the best bank accounts for travelling.

• Online Banking Services: If you need access to your bank account from anywhere, then it’s important to find a bank that offers convenient online banking services or opt for a digital bank. Many banks now offer mobile apps and other digital tools that make it easier for customers to manage their accounts on the go. Since most banks now have apps, it is best to evaluate the features and usability of each before making a decision.

• Account Types: When switching to a new bank, consider the types of accounts that are available. You may get a current account, or opt for a basic account to avoid fees or overdraft temptations. If you’d like a savings account on the side, make sure to compare interest rates banks offer.

• Customer Service: It’s also important to consider the customer service offered by each bank. Some banks may provide more helpful or personalised customer service than others, so it’s worth researching this before deciding which one is best for you.

Once you’ve chosen a new bank, the next step is to open an account. Most banks allow customers to open accounts online or in person at a local branch.

When opening an account in person, you will need to provide proof of identity, such as a passport or driver’s licence and proof of address, such as a utility bill or council tax statement. You may also need to provide details about your salary and employment status. This is because some banks require customers to have minimum income requirements to qualify for certain services or products.

If you decide to open an account online, you will usually need to provide the same documents required when opening an account in person.

Once the new account has been opened, you can start transferring funds from your old account to your new one. As discussed earlier, the Current Account Switch Guarantee can help make this process easier and ensure that all payments, direct debits and standing orders are transferred over to the new account.

It’s also important to switch any automatic payments or direct deposits from your old bank to the new one. Most banks allow customers to set up these transfers online, but if you need help with this process then you can contact customer support for assistance.

To formally close an account, you will need to contact your current bank and provide them with a signed letter or email stating that you wish to close the account. It’s important to ensure that all funds have been transferred out of the old account before closing it. Once the bank has received your request, they will usually contact you with confirmation that the account has been closed. You should also keep track of any fees or charges associated with closing the old account.

If your bank has physical branches, you may need to visit one in person to close the account. You will usually be required to provide proof of identity and sign a closure form as part of this process.

Once your account is switched, you should receive a confirmation letter from your new bank confirming that the switch has been completed successfully. You should also take the time to familiarise yourself with any new online banking portals or mobile apps provided by the new bank.

Depending on how your salary is paid into your account, you may need to inform your employer of the change so that they can update their records accordingly. It’s important to check with your employer to make sure this process has been completed correctly before expecting payments into the new account.