How to close a bank account

All good things must come to an end, and at some point in our banking lives, there will likely come a time you say goodbye to an account. If you want to move on and open a new one, it means ending things with your existing bank and starting a new relationship.

There could be lots of reasons for closing a bank account. Perhaps you’ve had your head turned by a shiny new offer, like a cash incentive or better interest rates? Maybe you’re moving home and want to bank with an organisation based in your area, or you’ve become unhappy with your current bank’s fees or customer service? Whatever the reason, when it’s over, it’s over. But how do you close a UK bank account and switch to a new provider?

How to close a bank account

Before you can close your existing bank account, you should open a new one. This means having a look at potential providers and working out what’s best for you. 

Current accounts and savings accounts are two of the main options you’ll be offered by a bank or building society. A current account is a good option for managing everyday transactions, like paying bills, withdrawing cash, and setting up direct debits and standing orders. A savings account is more suitable for keeping spare cash safe and earning interest on that money. Many people have both, and most have a current account, which is almost essential for living in the UK.

Current accounts

While all high-street bank accounts offer basic banking facilities for free, there are many different current accounts available, each with specific features. 

Some banks provide cashback for paying bills; others pay interest on your balance or include free insurance. Ultimately, choosing the best bank account is a matter of personal preference. Most of all, you will want to choose a current account that’s suited to your spending habits and your current situation. 

Suppose you maintain plenty of money in your account. In that case, you might be best off choosing one with a high interest rate to increase your savings over time. Alternatively, suppose you’re always going into your overdraft. In that case, you might be better off with an account that has lower overdraft fees. 

The different types of current account available

  • Basic, free bank accounts – ideal for those with a less-than-perfect credit history

  • Packaged or fee-paying accounts – these are current accounts with extra benefits, like travel insurance and breakdown cover, at a monthly fee and with a minimum deposit each month

  • Overdraft current accounts – standard accounts with an overdraft facility

  • Cashback and reward accounts – another fee-paying account that offers rewards in exchange for monthly fees and agreed-on deposits

  • Current accounts with a switching incentive – such as a cash payment for opening your account

  • Student accounts – these accounts offer specific benefits, like free railcards, to support studies

Almost all current accounts offer free mobile and online banking. So you can carry out the majority of tasks at home on your computer or using your mobile device.

To help you choose the best option, it’s a good idea to compare current accounts online or check with specialists like Which? to find out what other customers think. Banking is a competitive business. You’ll find providers offering different incentives to try and get you on board. These could include offers like:

  • Cashback from selected retailers

  • A cash or gift card incentive for switching

  • Interest on your account balance – you might get a high interest current account that offers more interest than savings accounts

  • Fee-free or cheaper overdraft charges

  • No fees on European transactions – this is helpful for travelling

  • Offset mortgage facilities

Savings accounts

Other types of bank accounts include savings accounts, which are ideal for putting money aside for the future. They’re designed to help you build up interest, and lots of people have one alongside their main current account. 

There are many different savings accounts, from fixed-rate bonds and cash ISAs to regular and bonus savings accounts. They all offer something different, so it’s a good idea to do your research and consult a savings account FAQ to find out what would be best for you. 

Most savings accounts have a minimum deposit amount, while others restrict the number of withdrawals you can make. Some are risk-free, while others are linked to the stock market, so they could go up or down. When choosing a savings account, it’s all about finding the features that best meet your particular financial needs.

Can I open a new bank account with a bad or non-existent credit score?

Yes, although you may be limited to a basic bank account. However, these accounts are great for helping to build or rebuild your credit score and come with all the benefits of day-to-day banking, including mobile and online banking. They’re also free, but you won’t get an overdraft facility or any extras.

Opening a new bank account

You’ll need to provide personal information to your new bank if you want to open an account. This could include documents like:

  • Driving Licence

  • Council Tax bill

  • UK utility bills, like gas or electricity

  • Bank or building society statement

  • Credit card statement

  • HMRC letter or tax statement

  • Mortgage statement

  • Tenancy agreement

  • Benefits statement

The exact list of documents will vary slightly from bank to bank, so check before submitting to avoid delays. Suppose you live outside of the UK. In that case, you’ll also need a tax identification number (TIN) and your foreign tax residency details. If you’re opening a joint account, you’ll need to provide everyone’s documentation.

Next, you’ll need to complete the application form for your preferred account using the information above. The bank will then run a credit check and other verification procedures – and if you meet their criteria, your application will be accepted. It’s worth noting that a bank or building society can refuse to open an account for you without explaining why. There can be many reasons for this, but the most common is a bad or non-existent credit history. However, as we’ve mentioned above, you should be able to get a basic bank account even with previous debts and outstanding county court judgements against you. One of the reasons these accounts exist is to help people rebuild their credit history.

Of course, if all goes well, you’ll pass the standard credit checks and have your application accepted by your new bank. If that’s the case, you’re now ready to close your old account and switch over to your new one. Let’s take a look at the best way to do this.

How to switch bank accounts

Switching bank accounts hasn’t always been straightforward. However, the UK’s Current Account Switch Guarantee means banks must arrange your account’s transfer within seven working days. Now, the process is quick and, usually, hassle-free. The service will do the following within seven days:

  • Set up your new account

  • Transfer money from your old account to your new one

  • Move all payments, including direct debits and standing orders, to your new account

  • Automatically direct new payments to your old account to your new one

  • Close your old account

All you need to do is complete a Current Account Switch Agreement form. This includes adding details of your old account (account number, sort code, card number) and when you want the account switch to happen. You can pick any working day that’s 7 days or more in the future. 

Finally, to close your existing account, you’ll need to fill in an Account Closure Instruction form. In many cases, your new bank will deal with this. After you’ve completed the paperwork, your new bank will start to set up your account and confirm your switching date. 

It’s as easy as that! And everything is covered by the Current Account Switch Guarantee, meaning you’ll be refunded any interest or charges incurred during the switchover.

Switching bank accounts with an overdraft

If you have an overdraft on the bank account you’re closing, this can usually be transferred to your new account. The transfer will depend on the type of account you’re opening and be subject to passing your new bank’s criteria and credit checks.

Suppose you’ve had an overdraft previously and always paid it back, and you’ve generally got a good credit history. In that case, you shouldn’t have any issues setting up a similar overdraft on your new account.

What happens after my account is switched?

After your account has been switched, your new bank will update your employer. They’ll also tell the Department for Work and Pensions (DWP) for any benefits you receive and organisations you have direct debits and standing orders with. 

You’ll also be told how to sign up for digital banking services like mobile and online banking and receive letters in the post containing your new account number, debit card, and PIN. 

Can you close a bank account online?

This can vary between different organisations, so it’s always worth checking with your current bank in the first instance. However, in many cases, you can start the process online and definitely over the phone. 

Closing a UK bank account when someone dies

Of course, closing a bank account is not always about getting cashback or better interest rates. Sometimes it’s due to more unfortunate reasons. For instance, when a loved one dies, the head of their estate will need to deal with their financial affairs, including closing their bank accounts. 

Before you can do this, you’ll need to register their death and get hold of a certificate that proves it. You also need to apply for a letter of administration that lets you legally manage the estate. 

Once you have the death certificate, grant of probate or letters of administration, and will, you can contact banks, building societies, utility companies, and insurers. After you’ve notified the bank, the deceased’s bank account will be frozen. Any payments going in or out of it, like direct debits and standing orders, will be stopped. 

The bank will let you know about any next steps. You’ll usually need to show two forms of identification, like your passport or driving licence, or a proof of address, as well as a copy of the death certificate and will. This is so the bank can begin the formal process of releasing funds and closing accounts.  

Withdrawing money out of a person’s bank account when they die

Most banks won’t let you withdraw money from a deceased person’s bank account before you’ve been granted probate or a letter of administration. Some banks may release money without a grant, but this is usually capped between £15,000 and £50,000. Suppose you are waiting for a grant of probate. In that case, the bank may let you access money in the account to pay for expenses relating to your loved one’s death, like the funeral.

As the executor, it’s down to you to withdraw money and distribute it to whoever’s in the person’s will. A solicitor will be able to help you with the process. If someone died without leaving a will, rules of intestacy would apply.

How to find lost bank accounts when somebody dies

If you don’t know the details of all their accounts or some have been lost, online tools can help you discover lost funds.

What happens if your bank decides to close your account?

Your bank should give you 2 months’ notice if they choose to close your current or instant-access savings account. With others, banks must provide a reasonable notice period of at least 14 days.

Things to consider before closing a bank account

Now you know how to close a bank account. You understand the process of opening a new one and switching with the UK’s Current Account Switch Guarantee, so you’re probably raring to get started. There are a few factors to consider first:

  • Are the services and features of your new account better than those you currently have?

  • Are there any charges linked to closing your account? In most cases, the answer should be no, but it’s worth checking

  • If you’re overdrawn, you’ll need to pay off what you owe before closing your account

  • If you’re not using the Current Account Switch Service, it’s your responsibility to notify your bank of your decision and make sure any direct debits and payments are transferred to your new account

These days, you can close your bank account, open a new one, or switch to a different bank more efficiently than ever before.

 As we’ve explained, there are many potential benefits of switching your bank account. And thanks to the UK’s Current Account Switch Service, you can make the change in as little as 7 days. This is the fastest and easiest way to close a bank account and open a new one. 

You can also switch bank accounts as many times as you like, so there’s no limit to how many times you could start over. Of course, there are many different reasons for closing a bank account. Whatever yours, closing your account should be a free, fast, and relatively straightforward process, so don’t worry!