Your bank stops processing transactions through that account when ready

When you close a checking account, the bank freezes it that day or within one business day. No more deposits will be accepted into it, and no checks or debit card transactions will go through. Any automatic payments you set up — like bill payments or paycheck direct deposits — will start bouncing or failing.

The bank doesn't delete the account right away. It stays in their system as "closed" for a period of time (usually five to seven years) so they can handle any checks that arrive late or disputes that come up. But from your perspective, the account is done.

Key Takeaways

  • Pending transactions may still process for a few days after closing, so keep funds in the account until you are certain everything has cleared.
  • Automatic payments and direct deposits will fail if they are still routed to the closed account, and you need to update them before closing.
  • Outstanding checks can still be cashed weeks or months later, which is why you should wait to close until you are sure no checks are in circulation.
  • Your bank will report the account closure to ChexSystems, a banking history database that other banks check when you open new accounts.
  • Closing an account does not hurt your credit score, but opening and closing accounts frequently can make banks hesitant to work with you.

Checks you wrote may still clear after the account closes

This is the biggest practical problem. A check you wrote last week might not reach the bank for another two weeks. When it does, the account is closed, and the check bounces. The person who received it gets a bounced check fee (usually $25 to $35), and they may come after you for it. You could also face a fee from your bank for the bounced check attempt.

The safest approach: wait at least 30 days after your last check before closing the account. If you are closing because you are switching banks, keep the old account open for a month or two even after you have moved your direct deposits and automatic payments over. It costs nothing to leave it dormant, and it protects you from this problem.

Automatic payments and direct deposits will fail

If your paycheck is set to deposit into the account you are closing, it will bounce back to your employer after the account closes. Your employer will hold the money and ask you to provide a new account number. This can take a few days to sort out, and in the meantime you may not have access to your pay.

The same thing happens with automatic bill payments. If you have set up automatic payments to your credit card, utility company, or loan servicer through the closing account, those payments will fail. Late fees and interest charges can pile up quickly. Before you close, log into each account where you have set up automatic payments and change the routing information to your new bank account.

Direct deposits are usually easier to update — you can often do it through your employer's payroll system online, or by calling payroll and giving them your new account number and routing number. Get this done at least a week before you close the old account.

The bank reports the closure to ChexSystems

ChexSystems is a database that banks use to check your banking history before they open a new account for you. When you close an account, your bank reports it to ChexSystems along with the reason (normal closure, account holder request, or other reasons). This report stays on file for five years.

A normal account closure does not hurt you. Banks expect people to close accounts. What can hurt you is if you close many accounts in a short time, or if the bank reports the closure as "closed due to misuse" or "closed due to fraud." If you have a pattern of opening and closing accounts frequently, some banks may decline to open a new account for you, or may require you to use a second-chance banking program with higher fees.

You may have a remaining balance or owe money

If you have money left in the account when you close it, the bank will send it to you. They typically mail a check to the address on file, though some banks offer to transfer the balance to another account you own with them. This usually takes five to ten business days.

If the account is overdrawn — meaning you owe the bank money — you must pay the overdraft before closing. The bank will not let you close an account with a negative balance. If you try to close without paying, the bank will keep the account open until the debt is resolved, or they may send the debt to a collection agency.

Pending transactions may still process briefly

Even after you close the account, transactions that were already in process when you closed may still go through for a day or two. A debit card purchase you made the day before closing might post the day after. This is because banks process transactions in batches, and some take longer than others.

This is why it is important to keep enough money in the account for a few days after closing, even if you think you have withdrawn everything. If a pending transaction posts and there is no money to cover it, you will get an overdraft fee. Once you are certain all pending transactions have cleared (usually three to five business days), you can safely withdraw any remaining balance.

Closing does not affect your credit score

Checking accounts are not reported to credit bureaus, so closing one will not show up on your credit report and will not change your credit score. Credit scores are based on credit accounts like credit cards, loans, and lines of credit — not on checking or savings accounts.

However, if you overdraft the account and the bank sends the debt to collections, that will show up on your credit report and will hurt your score. So make sure you pay any overdraft balance before the account closes.

Frequently Asked Questions

Can I reopen a checking account I closed?

Yes, but it depends on why you closed it and how long ago. If you closed it normally and want to reopen it within a year or two, most banks will let you. If the bank closed it due to fraud or misuse, or if you owe them money, they may refuse to reopen it or may require you to use a different bank.

What if I close my account and then a check comes in?

The check will bounce and be returned to whoever tried to deposit it. They will likely contact you for payment. You can still deposit the check into your new account if you catch them quickly, but the person who received the bounced check may charge you a fee for the inconvenience.

Do I need to tell the bank I am closing, or can I just stop using it?

You should formally close it through the bank. If you just stop using it, the bank may eventually close it for inactivity, but this can take months or years. Formally closing it ensures the account is shut down when ready and you know exactly when it happened.

Will closing my account affect my ability to open a new one elsewhere?

A normal closure will not hurt you. Banks expect people to close accounts. If you have a pattern of frequent closures or if the bank reported the closure as due to misuse, some banks may be more cautious, but most will still open an account for you.

What should I do with old checks after I close the account?

Destroy them or mark them "account closed" so they cannot be used. If someone deposits an old check into your closed account, it will bounce, and you may be held responsible for any fees or problems that result.