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
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.
What is the early account closure fee? ›
Early closeout fees on accounts
At some banks, closing an account too soon will cost you. Banks with this fee usually assess it if you close the account in the first 90-180 days. Early account closure fees typically run between $5 and $50.
How do I dispute a bank account closure? ›
File a complaint if necessary: You can submit a complaint to the federal Office of the Comptroller's Customer Assistance Group if you believe your account was wrongly closed.
How can I close my bank account without fees? ›
Review your bank's policy on account closure: If you find out that your bank will charge a fee for early account closure, consider waiting to close the account until the early closure period has passed. Early account closure fees are typically for accounts that have been open for less than 180 days.
What are the charges for account closure? ›
Experts say, if one is unhappy with their banking services, he/she can close the bank account within 14 days of opening it and also avoid closure bank 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.
What is account early closure fee? ›
Early account closure fee: Closing an account within six months costs SGD 50, or USD 20 in the case of a foreign currency current account.
What is early account closure? ›
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.
Can you get your money back if a bank closes your account? ›
What happens to your money if a bank closes your account? If you have money in the account at the time it's closed, the bank is required to return it to you minus any outstanding fees.
Can you reverse an account closure? ›
Once a bank account is closed, it usually can't be reopened. You'll have to open a new bank account with your institution or bank somewhere else. Some banks have second chance bank accounts, which allow you to open a bank account regardless of whether you have a negative banking history.
Can a bank charge you to close 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.
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. Review your deposit account agreement for policies specific to your bank and account.
What is a valid reason for closing a bank account? ›
Your bank account could be closed by your bank for many reasons, including inactivity or low usage. Banks aren't required to give notice when they close an account. Consult your bank's deposit account agreement for guidelines on when an account might be closed.
How do I force a bank to close my account? ›
Calling a bank will be enough to close an account in most cases, but some institutions may require you to fill out an additional form or write a quick note.
What is the early closure fee? ›
Early account closing fee. Closing your account too early has its repercussions. Banks have different timelines (usually 90 to 180 days) for how long you have to keep your account open before closing it without a fee, which can be up to $25.
Can I close my bank account without any charges? ›
The closing charges depend on the timeframe within which you decide to close the account. You have to pay Rs. 500 + GST if you close your account after 14 days but within 1 year.
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.
How much is an account closing fee? ›
According to CNET sister site Bankrate, early account closure fees are most commonly charged on accounts closed within 90 days of opening and typically range from $5 to $50. Early account closure fees can be found on savings, checking and money market accounts.
What is the penalty for closing a term deposit early? ›
Some banks might add a break fee onto your sacrifice in interest, which is typically $30. Less common is that some other banks impose a break fee which is worked out by looking at the bank's current rates, the account rate, how much money you want to withdraw and how close to maturity the account is.
What is the early closure charges for credit card? ›
Foreclosure charges: The charges applicable are up to <3%> of the outstanding principal amount. The next month's EMI (interest as per amortisation table) would be applicable in the event of pre-closure of the loan after the cooling off period. GST would be applicable.
What is the penalty for closing a checking 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.
