A bank account is a very important personal finance tool to manage your money. In fact, having a bank account means you have a safe place to store your money. Banking transaction is a very common financial activity and people withdraw money from their bank account to do various things. On many occasions, people might need to empty their bank account and close the account permanently. Today, I will discuss whether it is possible to empty a bank account in a single day and complete the procedure of closing a bank account. Let’s dig into the article!
If you are the owner of the bank account then it is always possible to withdraw all the money and empty the bank account in a single day. But you should understand that, if you have a large cash amount in your account then you have to notice the bank authority at least one day in advance and you will need the branch manager’s approval to withdraw the full amount and empty the bank account in a single day.
Savings Bank Account Withdrawal Limit
A savings bank account has a withdrawal limit thanks to a federal law called Regulation D. All the banks work under a fractional reserve system. When you deposit your money, the bank uses almost all the money for other things, such as consumer loans, credit lines, home mortgages, etc. Banks only hold a small amount of money of their customers’ deposits. They distinguish among different types of accounts to keep enough reserves to operate the bank procedures. Regulation D ensures all the banks have the proper number of reserves on hand. Below are withdrawal transactions for a savings account that fall under the rule:
1. Online transfers
2. Transfers initiated over the phone
3. Overdraft transfers to checking
4. Transactions made by check or debit card
5. Automatic or preauthorized transfers including bill payments or recurring withdrawals
Banking transactions that don’t apply to the savings account withdrawal limit:
1. Withdrawals or transfers made at ATMs
2. Transactions made in person at a bank
3. Withdrawals made by telephone if a check is mailed to the depositor
Steps To Close A Bank Account
Closing a bank account might look simple but it isn’t as easy as unsubscribing from email newsletters. However, if you follow all the below steps accordingly then you will be able to close your bank account easily without any hassle. Let’s check them out!
Step – 1: Open A New Account
Before closing a bank account make sure you open a new bank account to properly handle your everyday finances. Having a new account opened ensures you have a place to transfer over direct deposits and any payments or debits. However, when opening a new bank account, make sure you consider these factors –
1. No Monthly Fees: Try to find a free bank account or choose a bank that has fewer monthly fees.
2. Easy Access To Funds: Try to choose a bank that has an extensive ATM or branch network so that you will have easy access to your funds including transferring money online fast.
3. Perks: It includes various fees like a competitive interest rate, a sign-up bonus, ATM fee reimbursements, and other benefits.
4. Customer Service: Open a bank account in a bank that has better customer service than your previous bank.
Step – 2: Transfer Existing Scheduled Payments and Deposits
While closing your bank account, make sure you transfer all your direct deposits or automatic payments set up to the new bank account. You should talk with your employer regarding any forms you need to fill out to add the new bank account. You can make a list of all your monthly recurring payments and the list could include –
1. Car payments
2. Mortgage payments
3. Insurance payments
4. Student or personal loans
5. card payments
6. Gym memberships
8. Utilities and other household bills, etc.
Step – 3: Transfer The Funds
The next step is to transfer the funds to your new bank account. But before transferring all your funds make sure you check if there are any outstanding transactions available. Clear all your outstanding transactions and then move all your money to the new bank account. If you have unclear outstanding transactions then it might result in having to pay overdraft fees. Moreover, if your bank account has a minimum balance requirement then transfer the full amount only when you’re ready to close the bank account.
Step – 4: Contact The Bank To Close Your Account
If you have completed transferring payments, deposits, and funds then the next step is to contact the bank authority about closing your bank account. Nowadays, many banks allow their customers to close their bank accounts online. Moreover, you can also close your bank account via a phone call to customer service or a visit to your local bank branch. Depending on the bank, you might require to fill out an account closure request form or submit a written request in order to close the account. Therefore, you should follow your bank’s guidance on the proper contact method and start the closing procedure. When you submit the closing request, the bank will check your account to ensure it is in good standing and there aren’t any outstanding issues remaining. If there are any remaining funds available on your account then you can ask the bank to transfer the money to your new bank account.
Step – 5: Get Written Confirmation
Once your bank account is closed, make sure you get a written confirmation of your bank account closer. Don’t just assume that the bank account is closed just because a bank employee says it is. A bank might reopen a closed account and charge you overdraft fees. Therefore, the Consumer Financial Protection Bureau recommends that you should get written confirmation when you close a bank account. It will protect you in case the bank didn’t close your account or if there is an issue after you closed your bank account.
Reasons For Closing A Bank Account
There are many reasons you might need to close your bank account. Some common reasons for closing a bank account are –
1. Moving to a new city or state
2. To get better interest rates
3. Switching to an online bank
4. To qualify for a bank-offered bonus
5. To escape poor customer service
6. To avoid expensive fees
7. To gain better features and services
8. Opening a joint account
9. Consolidating your banking
10. Switching from a child account to an adult account
How To Close Certain Types Of Bank Accounts
The closing procedure of a bank account is not the same for all types of a bank accounts. There are various types of bank accounts available and they have different requirements to close the account. Here’s a look at a few examples –
1. Joint Account
If you want to close a joint bank account then the bank will ask you to submit a written account closure request with both account holders’ signatures on it. However, some banks only need one account holder’s authorization to close an account.
2. A Child’s Account
If you want to close a child’s bank account then you have to submit a written request from the guardian of the child. Some banks automatically convert the kid’s bank account to a savings account when the account holder turns 18. So, it won’t be necessary to close the children’s account when the account holder turns 18.
3. Inactive Account
If you want to close an inactive account then first you have to reactivate the account before you can permanently close the account. So, contact the bank’s customer service to reactivate your bank account and then submit a written request to close that account.
4. Overdrawn Account
If you want to close an overdrawn bank account then first you have to get your account back to at least a zero balance. Then, you have to submit a written request to the bank authority to close that account.
5. Deceased Person’s Account
Closing a bank account of a dead person is more complicated than closing other types of bank account. What types of documents you have to submit depends on the bank’s requirement as well as the law of the state. You can seek legal help to easily close a deceased person’s bank account.
FAQs About Is It Possible To Empty Bank Account In A Single Day? How To Close A Bank Account Properly?
Can You Close A Bank Account Online?
If your bank allows then you will be able to close a bank account online. But your bank account must be in good standing and has a zero balance before you can close the account online.
How Much Cash Can You Withdraw From A Bank In One Day?
There are no limits on the amount that you can withdraw from a bank in one day. However, if you want to withdraw a large amount of money then you will need the bank manager’s permission. Moreover, you should also know that any transactions over $10,000 are reported to the government.
Can I Empty My Bank Account?
If you want to close your bank account then you can empty the account. Apart from that, you have to maintain the minimum balance for your account. But if your bank doesn’t require you to maintain a minimum balance to your bank account then you can have a zero balance on your bank account.
What Happens If I Leave My Bank Account Empty?
If you leave your bank account empty for at least 24 months then your bank account can be frozen by the bank authority.
Is There A Fee For Closing A Bank Account?
Usually, there is no fee for closing a bank account. However, some banks might charge you an early account closure fee if you close an account soon after opening it.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.