Simple Steps for Closing a Business Bank Account

Closing a business bank account is a major financial decision for any SMB, whether you’re in Missouri, managing a growing startup, or operating a multi-state company. It’s not just about shutting down an old checking account or savings account; it’s about protecting your money, streamlining your accounting, and making sure your cash flow stays strong. If you’re switching to a modern fintech solution, consolidating accounts, or simply tired of the low interest rates and high fees at your current bank, this step-by-step guide will help you close your business bank account with confidence.

Why Closing Your Old Business Bank Account Matters

Leaving an old business bank account open can cause more trouble than you think. Here’s why you need to close it properly:

• Unnecessary fees*: Many banks charge monthly maintenance, overdraft, or inactivity fees even on dormant accounts, which can eat into your business revenue.

• Fraud risk: Dormant accounts are targets for unauthorized transactions, identity theft, or even fraud, especially if your credentials or password are compromised.

• Messy records: Open accounts can confuse your accountant, complicate audits, and make tax season a nightmare.

• Missed payments: If payroll, vendor payments, or customer deposits are still routed to your old account, you risk bounced payments, late fees, or damaged business relationships.

• Personal liability: For LLCs or corporations, leaving an account open after dissolution can expose you to liability or debt collection.

Properly closing your account ensures clear financial reporting, protects against fraud, and keeps your money working for you. For tips on comparing banks before switching, check out our guide to comparing business banks and accounts.

When Should You Close Your Business Bank Account?

You should close your business bank account when:

• You’re switching to a new bank for better interest rates, lower fees, or improved online banking and mobile banking features.

• You’re restructuring your business, merging, or dissolving your company (don’t forget to file your Articles of Dissolution and settle all debts first).

• You’re moving to a digital banking or fintech solution for better integration with your accounting, merchant services, or payroll.

• You want to avoid dormant account fees or reduce your risk of fraud.

• You’re closing a joint account after a partnership change.

Step-by-Step: How to Close Your Business Bank Account

1. Open Your New Business Account First

Before you close your old account, open your new business bank† account. This keeps your payments, payroll, and deposits running without interruption.

• Gather your documents: EIN, business registration, address, and ownership info.

• Set up online and mobile banking for easy access and management.

• Test small transactions to ensure your new account works.

• Order your debit card and credit card and set up accounting integrations.

• Choose a high-yield deposit account to maximize your interest rate and returns on your cash.

If you’re looking for a modern, zero-fee option with high-yield APY and integrated accounting, open a Holdings business account in minutes-no paperwork, no waiting in line.

Want to compare features across top banks? Visit our comparison page for a side-by-side look at what’s best for your business.

2. Inventory and Transfer All Automatic Payments & Deposits

Make a list of every recurring transaction connected to your old account:

• Incoming deposits: customer payments, payroll, government refunds, ACH, wire transfers, direct deposit.

• Outgoing payments: vendor invoices, subscriptions, utilities, loan payments, credit card bills, merchant services, mortgage payments, insurance premiums.

How to transfer:

• Notify vendors, clients, and payroll providers of your new banking details.

• Update payment info on all platforms and accounting software.

• Allow time for outstanding checks or payments to clear before closing the old account.

For a detailed checklist and more transition tips, visit our step-by-step guide to switching business bank accounts.

3. Reconcile and Settle Your Old Account

Before you initiate closure:

• Confirm all deposits and withdrawals are complete.

• Pay any outstanding fees, overdrafts, or penalties.

• Transfer remaining funds to your new account (via ACH transfer, wire transfer, or cashier’s check).

• Ensure all checks have cleared and no debts remain.

• Review any special rates, discounts, or benefits tied to your old account (such as a line of credit, merchant services, or treasury management products), as closing could affect your eligibility or increase your fees4.

Pro tip: Keep both accounts open for 30–60 days to catch any missed transactions. For more on managing your transition, see our how-to guide.

4. Gather the Right Documentation

Banks require specific documents to close a business account:

• Proof of business name and address (incorporation papers, business license)

• Tax ID (EIN)

• Account details and recent statements

• Formal closure request letter signed by authorized personnel

• Articles of dissolution (if closing the business)

• Authorization credentials for all signers

Check your operating agreement or bylaws to confirm who is authorized to close the account. For Holdings-specific terms, review our Business Banking Account Agreement.

Sample Closure Letter: For a template and tips, see our how-to guide for writing a closure application.

5. Submit a Formal Closure Request

Contact your bank and follow their closure process. Here’s how it works at some of the most common banks and platforms:

Always request written confirmation of account closure for your records.

6. Get Written Confirmation

After submitting your closure request, ask the bank for written confirmation. This is your official proof for your accountant, the IRS, or in case of a future audit. Keep all closure-related documentation for at least seven years.

What Do You Need to Close a Business Bank Account?

• Business name and address

• EIN (Employer Identification Number)

• Business registration/incorporation documents

• Account number and recent statements

• Formal closure request letter signed by authorized personnel

• Articles of dissolution (if closing the business)

• Authorization credentials for all signers

If your account is a joint account or requires multiple signatures, ensure all required parties sign the closure request. For more on required documents and process, see our resources page.

What Happens When You Close a Business Bank Account?

• All debits and deposits are blocked.

• Outstanding payments may bounce, leading to late fees or damaged relationships.

• The bank returns any remaining funds to you.

• If you owe money (overdrafts, fees, etc.), the bank may send your account to collections, affecting your credit score.

• Your accountant will need closure documentation for tax and audit purposes.

• You may lose preferential interest rates, discounts, or access to certain merchant services4.

For more on the legal and policy aspects, see our Business Banking Account Agreement.

Why Would a Bank Close Your Business Account?

Banks may close your business bank account for several reasons:

• Inactivity or dormancy: If your account has been inactive for a long period, especially with a zero balance, your bank may close it to avoid risk and administrative costs.

• Breach of terms: Excessive overdrafts, not maintaining minimum balances, or not meeting account criteria can all lead to closure.

• Suspicious transactions: Banks are required by law to monitor for anti-money laundering and fraud. If they detect suspicious activity, they may freeze or close your account.

• Changes in policy: Sometimes banks change their risk management policy or discontinue services in certain areas, which can result in account closure.

• Fraud or criminal activity: If your account is linked to fraud or you have a criminal conviction that was not disclosed, your account may be closed.

If your account is closed unexpectedly, contact your bank, check your credit report, and open a new account ASAP. For more details, see our resources page.

How Holdings Makes Closing (and Switching) Accounts Easier

Holdings is designed for busy SMBs who want a seamless, digital-first experience:

• Open a zero-fee, high-yield‡ business account online in minutes-get started here.

• Integrated payment tools let you transfer automatic payments and deposits in just a few clicks.

• All-in-one dashboard for banking, accounting, and bookkeeping-compare Holdings to other banks.

• No hidden fees, no minimums, and 2.0% APY-see how we stack up.

• Dedicated support and how-to guides for every step of your business banking journey.

For a deep dive on how to switch banks without the headaches, check out our step-by-step switching guide.

Frequently Asked Questions

How do I close a business PayPal account?

• Log in to your PayPal business account.

• Go to Settings.

• Under Account Options, select Close your account and follow the prompts.

• Make sure to withdraw any balance first-accounts with funds or unresolved issues can’t be closed.

How do I close a Chase business account?

• Visit the Chase business account closure page for step-by-step instructions.

• You can close online, by phone, in person, or by mail.

How do I close a Venmo business account?

• Log in to your Venmo business account, go to Settings, and select Close Account.

How do I close a Wells Fargo business account?

• Visit a branch, call customer service, or mail a closure request form. More info at Wells Fargo Business FAQs.

How do I close a Bank of America business account?

• Visit a branch, call, or mail a signed request. See Bank of America’s support page.

Common Mistakes to Avoid

• Forgetting recurring transactions: Missed payments can mean late fees or service interruptions.

• Not reconciling pending transactions: Make sure all checks and deposits have cleared.

• Skipping written confirmation: Without it, you risk future fees or unauthorized activity.

• Closing too early: Keep both accounts open during the transition to catch any surprises.

For more troubleshooting and transition tips, see our support center.

Final Tips for a Smooth Account Closure

• Plan ahead: Give yourself 2–4 weeks to transfer payments and reconcile transactions.

• Stay organized: Use a checklist or spreadsheet to track vendor and customer updates.

• Monitor both accounts: Keep an eye on activity during the transition.

• Communicate: Notify stakeholders early about new banking details.

• Retain records: Keep all closure documents for at least seven years.

For more actionable advice, visit our blog or explore our resources.

Related Holdings Resources

• Business Banking Account Agreement

• How-To Guides for Business Banking Success

• Compare Holdings Banking Solutions

• Open a High-Yield Account with Holdings

• Zero-Fee Business Banking Pricing

• Holdings Cash Account: High-Yield Banking

• Key Business Banking Tools & Resources

• Holdings Blog: Tips for Business Banking and Growth

Optimizing Your Business Banking Ecosystem: Advanced Tools, Compliance, and Strategic Growth

As your business evolves, so do your banking needs. Closing a business bank account is just one piece of a much larger financial puzzle. To truly thrive in today’s landscape, SMBs must leverage the full spectrum of modern banking tools, stay compliant with evolving regulations, and use strategic finance practices to drive sustainable growth.

Integrating Advanced Banking Tools and Technology

Financial technology (fintech) has made it easier than ever for SMBs to access a wide array of banking products. Beyond the basics of a business checking account or savings account, today’s financial institutions offer transaction accounts, money market accounts, and even demat accounts for holding securities. These tools help you diversify your assets and manage risk.

With the rise of online banking and mobile banking, you can now authorize wire transfers, ACH transfers, or remote deposits from anywhere. This accessibility streamlines everything from paying invoices to collecting payments via direct deposit or card-not-present transactions. Many banks, including Missouri banks and national providers, offer Mastercard and Visa debit cards with robust security features, helping protect your funds and user data.

Navigating Fees, Interest, and Credit

A smart SMB chief financial officer knows that fees and interest rates can make or break your cash flow. It’s important to understand the full fee schedule for your deposit account, including charges for wire transfers, overdrafts, or even escheatment if funds go unclaimed. Some banks waive fees if you maintain a minimum balance or use certain services, such as payroll or merchant services.

If you’re managing debt-whether a mortgage, business loan, or line of credit-compare interest rates and repayment terms across banks. Your credit score, payment history, and even your ChexSystems report can affect your eligibility for new loans or credit cards. For businesses with property or investment assets, working with a custodian bank or broker can help safeguard your equity and ensure compliance with securities law.

Ensuring Compliance and Consumer Protection

Regulation is a fact of life for every SMB. Federal Deposit Insurance Corporation (FDIC) coverage remains a cornerstone of consumer protection, insuring your funds up to the legal limit. Always verify deposit insurance with your bank, especially if you’re holding large sums in a single account.

Staying compliant means more than just following the law. It involves keeping accurate records for tax purposes, filing required documents, and ensuring your contracts and credentials are up to date. Automated systems can help track expenses, generate audit-ready data, and even flag potential issues before they become problems.

Building a Resilient, Growth-Oriented Banking Strategy

Your banking ecosystem should support both day-to-day operations and long-term growth. Use your business checking account to manage operational expenses and payroll, while a high-yield savings account or money market account can optimize returns on idle cash. Leverage technology for secure communication with your financial institution, and use innovative tools to analyze cash flow, investment opportunities, and risk.

Don’t overlook the importance of customer service and accessibility. Whether you’re calling a telephone number for support, using a mobile app, or visiting a branch, responsive service ensures you can resolve issues quickly and keep your business running smoothly.

By embracing innovation, understanding your banking options, and staying proactive about compliance, your business can maximize its assets, minimize risk, and set the stage for lasting success-no matter where you bank or what your growth goals may be.

For more ways to optimize your business banking strategy, visit our resources page or explore our business banking comparison tool.

Ready to Make the Switch?

Closing your old business bank account doesn’t have to be a hassle-especially when you partner with a modern platform like Holdings. With zero fees, high interest rates, and all-in-one financial tools, Holdings is the financial sidekick your business deserves.

Open your Holdings account today and let your money work harder for you-while you focus on growing your business. Start here.

Your business hustle deserves banking that works just as hard. No fees, no minimums, just rewards for your hard work-with up to 2.0% APY. Spend time growing your business, not reconciling your accounts. Holdings handles the financial heavy lifting, so you can get back to what matters most.

And remember: if you ever need help, our customer support team is just a click away.

Helpful Resources to Get the Most from Holdings

Want to learn more about how Holdings can simplify and supercharge your business finances? Check out these essential guides, tools, and insights designed specifically for SMB owners like you:

• Getting Started with Holdings
  How to Fund Your Holdings Account: Step-by-Step Guide
  How to Invite Team Members and Manage Roles
  Understanding Roles and Permissions in Holdings

• Banking Features & Fee Transparency
  Business Banking Fees Explained: How Holdings Keeps It Simple
  Free Domestic Wire Transfers: Fast, Secure, and Cost-Effective Payments
  How to Send Wires, ACH, and Internal Transfers with Holdings

• Accounting & Bookkeeping Integration
  How to Connect Your Holdings Account to Accounting Platforms (QuickBooks, Plaid, Yodlee)
  Implementing Internal Controls in Holdings
  How to Create and Manage Multiple Holdings Accounts for Better Financial Organization

• Industry-Specific Solutions
  Banking and Bookkeeping for Agencies
  Dental Practice Financial Solutions
  Nonprofit Financial Management
  Ecommerce Business Banking

• Business Growth & Insights
  Holdings Blog: Tips, Trends, and SMB Success Stories
  Comparisons: How Holdings Stacks Up Against Other Business Banks
  Customer Success Story: How Pest IQ Uses Holdings to Fuel Growth

• Support & Contact
  Contact Holdings Support
  Holdings About Us
  Holdings Pricing