What Do You Need to Close a Bank Account?
- In 2001, the USA Patriot Act came into effect and banks and other financial institutions are now required to have written procedures in place that detail the bank's customer verification processes. Generally, banks require you to produce at least one form of government-issued identification at the time that you open your account but a bank may require more than one form of ID. Typically, banks have the same ID requirements for account closures, in which case you can only close your account if you have the correct type of ID.
- You can only close your bank account if you have a zero balance. If you have money in your account then you can make a withdrawal to bring the account to zero and if you are overdrawn, you can make a deposit to bring the account to zero. If a credit or debit posts to the account after you have closed your account then your bank can either reject that transaction or re-open the account with a negative or positive balance. Therefore, make sure that all of your transactions have cleared before you close your account.
- If you are the executor of an estate then you can close the decedent's account by presenting the bank with a certified copy of the account owner's death certificate. You must also provide the bank with a copy of the letters of administration for the estate and those letters must name you as the personal representative or the executor of the estate. Additionally, you must identify yourself by providing the bank with a valid form of identification.
- Under both state and federal laws, you can name someone as a pay-on-death beneficiary on your bank accounts. When you die, your beneficiary can close your account by providing your bank with your death certificate and a valid form of ID. POD accounts do not pass through probate so letters of administration are not needed to close these accounts. However, if the account has more than one beneficiary listed, the bank must disburse the funds between all of the named beneficiaries before closing the account. If the bank cannot locate a beneficiary, then the account must remain open. Eventually, the unclaimed funds in the account are given to the state in a process called "escheatment."
