What You Should Learn Before Closing a Bank Account in Canada

Knowing how to shut a bank account is crucial, whether it’s because you found better conditions at a different financial institution or you’re unhappy with your present arrangement. 

You must take all the necessary precautions to guarantee a smooth transition between your old and new banking systems. 

It may assist you in avoiding any time lapses that would be to your best advantage, as well as unanticipated bank fees or penalty costs.

Prepare Yourself Before Closing Your Bank Account

Before closing your checking and savings accounts, take into consideration the following.

Locate a New Bank

You will need a different bank to handle your deposits and bill payments unless you decide to live off the grid. 

Do some study and contrast the options available. Ensure that your new bank provides the financial services and products you need.

Adapt Automated Deposits And Payments

Before formally shutting down your old account, you must change any automated payments and deposits with your new details. 

This includes direct deposit paychecks from your employment and subscriptions to streaming services like Spotify and Netflix.

Money Should Be Transferred To The New Bank Account

It’s time to deposit the remaining funds into your new account now that it’s operational and has your most recent banking details. 

After doing this, cancel your previous account as soon as possible since waiting too long may result in an overdraft fee if you pay any fees with a zero balance.

Backup Strategy

Think of a backup strategy before transferring all the funds from your old account to your new one. 

Even if you believe you have taken care of all of your typical direct debit payments, there is a chance you may have overlooked anything.

Keep some money in your previous account for a short while, so you don’t have to take out online payday loans Canada and you can easily cover any payments you may have forgotten. This will assist you in avoiding late fines or other consequences.

How to Terminate a Standard Bank Account

Depending on the institution you bank with, there will be varying conditions for canceling your bank account. In general, there are three common strategies. 

These consist of the following:

In-person

Visit the bank while it is open. Make sure you have your bank card and two kinds of identification, one of which should include a picture. 

Give the teller these documents and tell them you need to end the account. 

The bank might transfer your money to your new account based on your intentions. They can help you manage your pre-authorized payments as well. 

The teller will let you know at that time if there are any further actions you need to take.

Online

You may close numerous bank accounts online using the banking website, a common practice as technology becomes more pervasive. 

Often, due to the lack of specific capabilities on mobile sites, this cannot be done on a smartphone or tablet. Ensure you have access to a computer or laptop if you want to terminate your account online. 

If you cancel all your accounts with one institution, keep in mind that not all allow online cancellations.

By Phone

This is a better choice, especially if it’s your first time closing a bank account. You may get all the information you want to terminate the account by speaking with a customer support agent. 

Depending on your circumstances, you may be able to complete the cancellation over the phone, but you could need to take further steps.

What Must Be Completed To Shut Your Bank Account

You can cancel your account online, depending on your bank. Some banks demand that you physically visit a branch.

While banks are embracing new technologies and online banking and enabling customers to end accounts online and even open joint accounts with another person, there are situations when doing so in person might be more affordable and fee-free.

Closing A Bank Of Nova Scotia Bank Account (Scotiabank)

If you bank with Scotiabank, you must physically go to a branch to terminate your account. Within 90 days of creating your account, Scotiabank will charge you $20 to cancel it. 

If you need to (and haven’t already) move your money to another banking institution, they will charge you $20.

A Bank Account With The Royal Bank Of Canada Being Closed (Rbc)

RBC has three options for closing a bank account: in-person branch visits, phone calls to customer support, or sending secure mail via its online banking service.

Within 15 days after account opening, closing an account is free. If you choose to terminate your bank account after 15 days, they will charge you $20; however, if you want to end your bill in person at a nearby branch, they won’t charge you anything.

Removing Funds From A Toronto Dominion Bank Account (Td)

You may cancel your TD bank account in one of three ways: in-person at a branch, by submitting a written notice, or by phoning customer support.

You must need money to cancel your account over the phone. If you need TD to transfer your money to another bank, there is a $15 fee.

Do Bank Account Closings Affect Credit Scores?

A credit score is significant today, especially if you look at the statistics: 38% of Canadians use credit cards for convenience and to improve their credit history. 

But you have nothing to worry about. As long as you do not owe money that goes into collections, closing your savings and checking accounts does not affect your credit score.

Main reason for credit card use among Canadians by budgeting group

Link: https://www.canada.ca/en/financial-consumer-agency/programs/research/canadian-financial-capability-survey-2019.html

Your credit score might also suffer if you decide to close your credit card account. This is true because credit bureaus take your credit history into account when calculating your credit score. 

Your credit report also includes information about how you use your credit card (payments and balances).

The influence on your credit score increases as a credit card becomes older. You may shut one of your credit cards while keeping the other open since credit cards are not linked to your checking or savings accounts. 

All it takes is a phone call to cancel your credit card account.

Bottom Line

Although closing your bank account may seem like a hassle, it doesn’t have to be. After researching and planning, you’ll be astounded at how fast you can terminate your old account and switch to one that better meets your requirements.