How to Properly Close a Joint Bank Account

A joint bank account offers a shared financial tool for individuals, commonly used by married couples, family members, or business partners to manage collective funds. These accounts provide equal access for all listed owners to deposit, withdraw, and conduct transactions. Circumstances like relationship dissolution, financial simplification, or estate settlement often lead individuals to consider closing such an account.

Essential Preparations for Account Closure

Before initiating the formal closure of a joint bank account, preparatory steps are necessary to ensure a smooth transition and prevent complications. Understanding the specific ownership structure of the account is important. Joint accounts fall under two main categories: Joint Tenancy with Right of Survivorship (JTWROS) or Tenancy in Common.

Under Joint Tenancy with Right of Survivorship, if one account holder passes away, their share automatically transfers to the surviving account holder(s) without needing to go through probate. Conversely, Tenancy in Common allows each account holder to own a specific, unequal percentage of the account, and there is no right of survivorship. Upon the death of a tenant in common, their share becomes part of their estate and is distributed according to their will or state probate laws. Most banks require the consent of all account holders to close a joint account, although some may permit a single owner to initiate the closure.

Address the account balance. Before closure, the account must be brought to a zero balance by withdrawing all funds or transferring them to a new, designated account. It is advisable to open a new individual or joint account elsewhere beforehand to facilitate this transfer and ensure continuous access to funds. Any remaining funds can be distributed among account holders according to their prior agreement, which is particularly important in cases of relationship dissolution.

Redirecting all automatic transactions is another important preparatory action. This includes identifying and updating all automatic deposits, such as paychecks or government benefits, and automatic withdrawals, like bill payments, subscriptions, or loan payments. Updating these before closure prevents disruptions to financial obligations and ensures payments are not missed or returned unpaid, which could incur fees. Reviewing recent bank statements from the last 6 to 12 months can help identify all recurring transactions that need to be updated.

Finally, gathering all necessary documentation is necessary for the closure process. Account holders should prepare valid government-issued identification for all parties involved, such as a driver’s license or passport. The account number and recent bank statements are also required. If the closure is due to the death of an account holder, a death certificate may also be necessary.

The Account Closure Process

Once all preparatory steps are complete, initiate the formal account closure with the bank. Methods for submitting a closure request include:
Visiting a bank branch in person.
Contacting customer service over the phone.
Utilizing online banking portals.
Sending a request via mail.

For in-person closures, all account holders may need to be present, though some banks permit one owner to close the account with proper identification. During this visit, or through other methods, specific forms provided by the bank will need to be completed. These forms require signatures and dates from the account holders to authorize the closure. Some banks might require a written statement of intent, which could even need notarization for mailed requests.

Banks implement verification procedures to confirm the identity of individuals requesting the closure. This involves identity verification for all account holders and may include signature verification against records. The bank will also verify that the account has a zero or positive balance and no pending transactions or outstanding fees before proceeding. If an account has been recently opened (within 90 to 180 days), some banks may impose an early closeout fee.

The timeline for account closure can vary. If the account has a zero balance and no pending transactions, the bank might close it immediately upon request. However, some accounts may be placed in a “pending closure” status for a period, such as 10 business days, to allow any final transactions to clear. Overall, the process can take anywhere from a few minutes to several weeks, depending on the bank’s specific policies and the complexity of the account.

Post-Closure Steps

After submitting the closure request, take several post-closure actions to confirm the account’s status. First, verify the account has been successfully closed. This can be done by checking for a final statement, receiving a confirmation letter from the bank, or attempting to log into online banking to see if access has been revoked. Some banks may send an official confirmation notice via mail or email.

Retain records related to the closed account. It is advisable to keep copies of all closure documents, correspondence with the bank, and final statements for an extended period, at least five to seven years, for tax purposes or potential future inquiries. Banks are required to maintain records for several years, between 3 to 10 years, even after an account is closed.

Monitoring other linked accounts and bills is also important to ensure all automatic transactions were successfully redirected. For a period of at least one to three months, regularly check new accounts for correct direct deposits and bill payments to catch any missed transfers or unexpected charges. If a direct deposit is sent to a closed account, it is returned to the sender within 5 to 10 days, but this can cause delays in receiving funds.

Finally, if any unforeseen issues arise after closure, such as an unexpected transaction or a bill that was not successfully redirected, promptly contact the bank that previously held the joint account. They can provide guidance on resolving the issue and retrieving any misdirected funds.