How to close your bank account in Canada

This article has been updated from a previous version

When you visit a bank branch to close your account, you may be asked why you’ve decided to discontinue your relationship with them.

A bank representative may even offer to address any grievances or complaints, so that they can keep you as a customer. But sometimes, the reasons to move on are clear and compelling.

Here’s a guide to help you make the process as smooth as possible, along with insights into how Canada’s top banks handle account closures.

Common reasons for closing a bank account

Here are some common reasons why some people choose to close their bank account:

Lower fees

For many, rising costs at their financial institution are the tipping point. Banking fees — whether monthly maintenance charges, transaction fees, or hidden costs — can quickly add up.

Some banks also reduce the value of their service offerings without lowering fees, leaving customers feeling shortchanged. If the expenses outweigh the benefits, it might be time to explore alternatives with lower or no fees.

Interest rates

Interest rates on savings accounts have fluctuated over the years, and many people opt to switch banks to lock in better returns. Online banks, for instance, often provide higher rates than traditional brick-and-mortar institutions.

To stop an automatic transaction

Fraudsters can set up automated transactions to take money directly out of an account. Sometimes, these illegal debits are difficult to trace, and the only option is to close the account to stop the unauthorized payments.

Life changes such as divorces or separations

Joint accounts are common among couples, but when a divorce or separation is on the horizon, decisions need to be made about shared finances. Closing a joint account is often one of the first steps, helping both parties establish separate financial identities.

Moving or relocating

Relocating to a new city, province, or country can make it inconvenient to stay with your current bank — especially if its presence is limited in your new area. Even with improvements in online and mobile banking, not all financial institutions provide access to every service remotely, which makes a local branch essential.

Related: Looking for a new bank account?

A comparison of Canada’s five big banks

Some financial institutions have strict guidelines when it comes to closing an account with them. Often, customers are left with only one choice: visiting their home branch in person.

Here we compared Canada’s top five banks to find out how to close a personal bank account and what happens if you leave it inactive for too long:

Tips for account closures:

• Check for fees: Some banks charge fees for closing accounts soon after opening them.
• Prepare ID: Always bring identification to close your account in person.
• Redirect transactions: Update direct deposits and payments to avoid disruptions.

By following each bank’s specific closure process and being mindful of dormant account policies, you can make the transition to a new financial institution smooth and stress-free.

Related: How to break down the value of a credit card?

Steps to take before closing your bank account

Closing a bank account involves more than simply making a request at your branch. Following these steps will ensure the process is smooth and hassle-free while avoiding potential fees and complications.

1. Check your account balance: Make sure your account has a zero balance before closing it. You’ll need to withdraw or transfer any remaining funds. Many banks won’t close an account until it’s completely empty, so check with your bank about any minimum balance or fees related to withdrawals.
2. Redirect incoming payments and withdrawals: Before closing your account, update direct deposits (like your paycheck) and automatic payments with your new banking details. This helps avoid disruptions, such as missed payments or late fees.
3. Clear any pending transactions: Allow time for all pending transactions, including checks and card purchases, to clear. Closing an account too early could lead to complications if transactions are processed afterward.
4. Get written confirmation: Once your account is closed, request written confirmation from your bank to ensure there are no fees or discrepancies later. This step can also prevent accounts from being inadvertently reopened due to recurring transactions.

Related: How to transfer your RRSP

What happens to unclaimed balances?

If a bank account becomes inactive and unclaimed for 10 years, its balance is sent to the Bank of Canada, typically in December of each year.

Balances less than $1,000 are held for 30 years, while those of $1,000 or more are kept for 100 years before they are sent to the Receiver General for Canada.

If you’ve lost track of an account, you can search the Bank of Canada Unclaimed Balance Registry to locate and submit a claim to retrieve the funds.

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