If you’re not happy with your current bank account, you should close it and find one that is better suited to your needs.
Unfortunately, some banks don’t make the process as simple as they could. This leads many people to retaining unused bank accounts much longer than they should. Rather than risk being charged inactivity fees or monthly fees on an inactive account, here are some simple steps you can take to close your bank accounts.
Shop around for a new account
Before you close down your old account, take the time to shop around and find a new account to replace it with. Think about what features you’re currently unhappy with and ensure that your new account doesn’t have these things.
If you’re currently unhappy with the fees charged, look for a fee-free account. Perhaps you want an account that allows you to make more transactions per month without slugging you with excess fees. Maybe you’re after a savings account that lets you earn some interest on the cash sitting in your account.
Regardless of what you’re searching for, be sure you check out your options before you proceed. The last thing you need is to open a new account, only to find out later that the fees are much higher than what you were already paying on your old account.
Comparison of transaction accounts with debit card access
When you’ve found the right one to suit your needs, go ahead and open the account.
Update debit and credit information
If you’ve already got some direct debit or direct credit payments going into or out of your account, you will need to transfer these over to your new account. This used to be quite a time consuming process, but as of 1st July 2012 banks are required to help you out with this process.
Ask a representative at your new bank to help you with your transfers. They’ll get in touch with your old bank and ask them to provide a list of all your direct debits and direct credits. You’ll be shown the list and asked which of those payments you want shifted across to your new account.
These will include things like:
- Salary credit payments
- Regular direct debit payments for any loan repayments or credit card payments
- Direct debit agreements for insurance policies, gym memberships, regular subscriptions, or utility bill payments
Be sure to take a note of your new BSB and account number and then give this to your employer or payroll officer to be sure your salary goes to the right account next time you get paid. You should give the same account information to anyone else who pays you money, including Centrelink or your rental agent if you’re having your rental income credited directly to your account.
Remember, your new account won’t have information saved about any BPAY payments you’ve made. You’ll have to work these out through your new account when the next payments are due.
Back up plan
Before you transfer all the cash in your old account over to your new bank account, take a moment to think about a backup plan. While you may think you’ve covered all your usual direct debit payments, there is a risk that you may have forgotten something.
Leave some cash in your old account for a short time to cover any payments you may have overlooked. This will help you avoid missed payment fees or penalties.
Close your old account
When you’re sure your new account is up and running properly, it’s time to close your old account. This should only be done when you’re sure all your direct debits and credits have been successfully transferred over and you’ve given your new account details to anyone paying money into that account.
It is important to eventually close that old bank account, even if you leave no cash in there. This is simply because some banks may charge inactivity fees for not using your account. Others may continue to charge monthly fees on the account, which could put you in debt.
With most banks, you are required to go into a branch to close your account. Some may ask that you request for the account closure in writing, along with your signature to verify the process. The easiest way to know for sure which option your bank wants is to call them and ask.
However, don’t make the mistake of thinking your account will be closed over the phone just because you spoke to someone. Banks really don’t want to lose your business, so they will make you work just a little bit to finalise that account closure. Listen to what they want you to do and then get the process going.
Switching bank accounts doesn’t have to be difficult. You simply need to be sure everything is in place with your new account before you shut down the old one. This will make sure the process is as smooth as possible for you.