Closing your current savings account is a common practice if you want to earn more interest on your savings, avoid fees, or switch to another bank. However, many people refrain from closing their savings accounts out of concern that doing so might hurt their credit history.
So, does closing a savings account affect credit, or is this only a myth? In this article, we’ll reveal the answer and show you how to close a savings account without hurting your credit score.
Is It Bad To Close a Savings Account?
There’s nothing wrong with closing a savings account you no longer use, and there are no negative consequences for doing so. In fact, if you don’t close a savings account you’ve neglected for a while, you may end up losing money to fees in case you let your account balance fall below the minimum balance requirement. In that sense, closing a savings account you don’t use can even help you save money.
Is There a Penalty for Closing a Savings Account?
There are typically no penalties for closing a savings account. However, some banks and credit unions may charge you a fee if you close an account shortly after you open it. This is called an early account closure fee, and you may have to pay it if you close an account within 90 to 180 days of opening it, depending on your bank/credit union’s terms.
Does Closing a Savings Account Affect Credit Score?
Generally, closing a savings account has no impact on your credit score. This is because checking and savings accounts don’t involve debts, so the three major credit bureaus (Experian, TransUnion, and Equifax) don’t consider them when compiling credit scores.
However, closing a savings account that has a negative balance can hurt your credit score. If you close the account without paying off a negative balance, the bank can send the outstanding balance to a third-party collection agency, which may report your account to the credit bureaus. If this happens, your credit score will suffer a downgrade that may stay on your credit report for up to seven years.
Your bank can also report your negative account balance to ChexSystems—an agency that keeps reports on your bank activity like bounced checks, unpaid fees, and open/closed accounts. For this reason, negative entries in your file, such as closing an account with an outstanding balance, may affect your ability to open a new savings account.
How To Close a Savings Account Without Hurting Your Credit Score

The first step to take before closing a savings account is to ensure the account is in good standing so that your credit isn’t affected. Besides this, here are a few additional steps you should take to safely close your account:
- Open a new savings account
- Update automatic transactions
- Get rid of checkbooks or debit cards
- Download your bank statements
- Close the old savings account
Open a New Savings Account
Make sure you open a new savings account before closing an old one so that you can immediately transfer any leftover money from your account. To ensure your account meets your needs, pay attention to the following factors when choosing a new savings account:
- Monthly service fees
- Debit card features
- Customer service response time
- ATM networks
- Branches nearby
Update Automatic Transactions
Before deactivating a savings account, you should check if there are any automatic payments drawn from the account you want to close. If you forget to update them before deactivating the account, your credit may be negatively affected due to missed payments.
Not all savings accounts allow setting up automatic payments because some have stricter withdrawal limits, but if your new account supports this feature, you can reroute direct deposits and recurring bill payments to it.
Get Rid of Checkbooks or Debit Cards
If you have debit cards, ATM cards, and checkbooks tied to the savings account you’re closing, make sure you destroy them once the account is closed. This way, you can avoid accidentally writing a check or attempting to use a card from an account that you’re no longer using.
Download Your Bank Statements
When you close your savings account, you likely won’t be able to access your bank statements anymore. While some banks allow you to see the previous statements for a certain period after closing the account, it’s still a good idea to download them in case you need to reference them later.
Close the Old Savings Account
Once you’ve covered the previous steps, you’re ready to close your account. Depending on your financial institution, you may be able to close your account in the following ways:
- Online
- Via phone
- Using a mail-in form
- By visiting a branch
You’ll likely get an email from your bank to confirm the account closure. If not, you can contact customer service or visit the bank in person to confirm the account is no longer active and ask for a written confirmation.
Which Savings Account Should You Open?
If your current savings account isn’t meeting your requirements, but you still haven’t found an account that may be a worthy replacement, there are plenty of options to choose from. Depending on your money-saving purpose, you can explore savings accounts like:
- Traditional savings accounts—These accounts allow you to keep your money safe and earn interest in the process. They offer low interest rates, which makes them more suitable for achieving short-term financial goals
- High-yield savings accounts—These are similar to traditional savings accounts, but they offer higher interest rates and low or no monthly fees
- Education savings accounts—Accounts like 529 plans and Coverdell ESA are designed to help you save for college expenses while earning interest
- Individual retirement accounts—IRA savings accounts are long-term, tax-advantaged savings plans you can use to save for retirement if you earn an income
Still, none of the savings account options above provide sufficient security features to prevent unauthorized access to your savings account. The only type of savings account that offers premium interest rates plus excellent security is FortKnox by Austin Capital Bank—a security-first savings account that grows and protects your savings.