Bank Transfer Day: A Guide to Closing Your Account

Photo by Alan Cleaver.

Bank Transfer Day is gaining some serious steam. Although it's not technically affiliated with Occupy, it's being embraced by the movement and is the first specific call to action since the Occupy protests began.

The description and goal of Bank Transfer Day is straightforward: If you currently have checking and savings accounts (deposit accounts) with a big bank, the organizers encourage you to remove all of your funds, close your accounts, and place your money in a new deposit account with a not-for-profit credit union. The organizers ask that you do this by November 5. And since November 5 is a Saturday, you should definitely do it before November 5 since many big banks aren't open on weekends.

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Bank Transfer Day can significantly impact the way banks are able to make a profit. In simplest terms, banks rely on our deposit account balances to make loans that net substantial profits. Without our deposits, banks can't make loans. And if banks can't make loans, they're going to take notice. And they're surely going to freak out.

So if you currently have a deposit account with a big bank and you want to participate in Bank Transfer Day, read the following steps. It's a field guide that will help you accomplish this meaningful task of shifting your money from corporations that serve the 1% and put it with an organization that cares about the remaining 99%.

What You Need To Do Before Walking Into Your Big Bank Branch

1. Go through previous big bank statements to see exactly which accounts you have. Be sure to check the names on each account. If you are closing a joint account with two holders, it makes a difference whether the word joining your names is "and" or "or." If the account in your name is in your name and someone else's, you will both need to go in and close the account. If the account is in your name or someone else's, either of you can close the account. Some big banks may vary on this policy, so it's best to call your big bank to find out exactly what you need to do prior to walking into your local branch.
2. If you have any loans with a big bank, look closely at your statements and paperwork you signed at the time of closing. There very well might be penalties that will trigger a higher interest rate if you close your checking account. Big banks excel at offering customers lower interest rates on mortgage and auto loans if you open a checking account and maintain a minimum balance. A primary checking account is a bank's ultimate goal to securing your, ahem, loyalty. A primary checking account also leads to, on average, the opening of three additional accounts with that financial institution. Decide whether or not you can or have the willingness to pay off the outstanding loan balance. If you do not pay off the loan balance, call your bank to ask about escalating fees or rate increases by closing your checking account before walking into your local branch to close the checking account.
3. Stop using your deposit accounts ASAP. You need to allow everything to clear the accounts completely before you close them. This clearing process takes about two weeks to complete. Keep close tabs online to see which transactions are still outstanding.
4. Research non-profit credit unions. You will need a place to deposit your money, so perform this research before closing your big bank accounts. A good resource for finding credit unions is Find A Credit Union. Make your decision on which non-profit credit union you will join before walking in to the big bank branch to close your deposit accounts.

What To Do When You Walk Into Your Big Bank Branch

1. Approach a branch teller and tell him/her that you would like to close your accounts. The teller might hand you off to a customer service representative due to the bank's account opening and closing protocol. Or the teller might hand you off because they don't want to tie up customers' wait time in the teller line.
2. If the bank employee asks why you are closing your account, decide in advance the reason you're going to provide. You can tell them you're unhappy with big banks. You can tell them you're a part of the 99%. Or you can decline to give them a reason. The most important thing is to remain focused and not do anything imprudent that will keep you from accomplishing your goal of closing your deposit accounts and walking out of the big bank branch with your money.
3. Once the account closing process begins, ask the bank employee if you have any cash reserve accounts tied to your deposit accounts. It doesn't make sense to keep a line of credit open that was tied to your soon-to-be closed account.  
4. The bank employee will ask if you would like to receive your money in the form of a check or cash. If you want to make it rain outside of the big bank branch, request to receive cash. If you don't want to make it rain, we advise you to request a check.
5. The bank employee will either give you a confirmation letter of your accounts being closed or they will mail it to you. Once you receive the letter, keep it on file for up to five years.
6. Walk out of the big bank branch.
   

What To Do After You Have Closed Your Big Bank Deposit Accounts

1. Shred all remaining checks and debit cards. This is an essential step. If you mistakenly use the checks or debit cards, you will be going back to the big bank branch—except this time it will be to clean up your mess.
2. Go to the non-for-profit credit union you selected prior to closing your deposit accounts at the big bank. Open the accounts, get a new checkbook and debit card, and shake the employee's hand, or even give him/her a hug.

3. Sync up your new deposit account information (ABA routing number and account number for checks, card number, expiration date, 3-digit security code for debit card) to any relevant accounts that require automatic payments. For example, if you automatically pay your car insurance on a monthly basis with your checking account, be sure to sync up your checking account with your car insurance company. You may also want provide your new account information for online products such as iTunes, eBay, and PayPal.

4. Stand in front of a full-length mirror. Admire yourself. You've earned it.

That's all there is to it. Sounds like a lot, and perhaps it is. After all, big banks played a role in making this process difficult because it acts as a deterrent for people to withdraw their money and close their accounts. But if you stick to this guide and remain focused on your goal, you can impact meaningful and measurable change by participating in Bank Transfer Day.

This article originally appeared in FearLess Revolution.

More resources for Bank Transfer Day:
Facebook: http://facebook.com/nov.fifth
Twitter: http://twitter.com/banktransferday
Twitter Hashtag: #louderthanwords
Email: info@banktransferday.org

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YES! Magazine encourages you to make free use of this article by taking these easy steps. aharbin. (2011, October 18). Bank Transfer Day: A Guide to Closing Your Account. Retrieved May 22, 2012, from YES! Magazine Web site: http://cms.yesmagazine.org/new-economy/a-field-guide-to-closing-your-bank-account. This work is licensed under a Creative Commons License