How do I close a bank account?

Opening a new bank account in Australia is as easy as filling in a form online and pressing apply, however, closing a bank account can be another thing altogether. If you’re trying to close your bank account for good, there are some hoops you may need to jump though.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone. However, some banks will let you request to close the account via your internet banking. Check your bank account provider’s website for details. 

Quick check list: closing a bank account

1. Choose your new bank account
2. Cancel any scheduled or recurring payments
3. Update your direct debit details with creditors
4. Contact your employer, or any other payees
5. Export your payee address book
6. Transfer the balance of your account to the new bank account
7. Close your account

How to close a bank account

• Step 1:Choose your new bank account

First things first, you’ll want to take time to choose your new bank account carefully. It’s worthwhile taking this step first, so you can transfer the balance of your old bank account somewhere, and set up your direct debits early to prevent late payments. Consider comparing low fee options through RateCity’s helpful comparison tables.

• Step 2: Cancel any scheduled or recurring payments

If you have any direct debits scheduled to be withdrawn from the bank account you want to close, you will need to change these. This may include bill payments, subscriptions, such as Netflix or your gym membership, or even savings account transfers. Go through your bank statements if you’re not sure how many people you pay money to, then reach out to each company and advise them to remove the old bank details.

• Step 3: Update your direct debit details with creditors

Now you’ve opened your new account, you can advise any creditors, whether online or in person, of these new details for direct debits. This should also include any loan payments, such as your mortgage or car loan.

• Step 4: Contact your employer, or any other payees

It’s not just the companies and creditors you pay money to that need to know your bank details have changed. You’ll want to also advise your employer, so they can deposit your income into the new bank account (if applicable). If you receive payments from Services Australia, you will also need to update your details with them. If you receive a rental income, or any other income from investments, you may need to advise your finance broker or property manager of this change in details.

• Step 5: Export your payee address book

You’ll likely have months, if not years, of saved third-party bank account details in your payee address book. To save yourself time and hassle asking friends, family or creditors for their bank details again, export your address book and re-upload it in your new bank account.  

• Step 6: Transfer the balance of your account

Now is the time to transfer most of the balance of your account to your new account. If you are closing any linked savings accounts, this is when you may transfer this balance to your new savings account as well.

Keep in mind that between steps one and six, a stray bill may still be debited from the old bank account. It may be worth keeping, say, $100-$200 in your old account up until the moment before you permanently close the account to avoid instances of late payments.

• Step 7: Close your account

You’ve opened your new account, advised every relevant party of the new account details, saved your address book and transferred your bank account balance over; now is the time to say goodbye. You may be able to close your account online or over the phone, however many banks and credit unions may prefer you do so in person, at a branch.

Don’t let this extra step prevent you from closing your account - just be prepared to travel to your local branch to finalise the process. 

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