How To Close A Bank Account In Canada (Free Sample Letter) : Net Worth Update May 2020 (+8.63%)

Before You Close A Bank Account Follow These Important Steps

There may be several reasons why you’d want to close a bank account and many more to do it the right way.

Closing a bank account is not something you want to rush into until you’ve completed a series of tasks.

One of the main reasons people close a bank account is because they are unhappy with the services provided.

Other reasons for closing a bank account may be a divorce, moving to a new city, or for change.

New Bank Account Promotions

You may even find that certain banks offer promotions for new customers who open a bank account in Canada.

I’ve seen everything from special interest rates, free Ipads, cell phones, cash, and flat-screen televisions.

Banking Customer Service

Today, online banking and virtual digital banking are part of daily living although many people still visit the brick and mortar bank.

Both online banking and banking in person still need to be addressed from the customer service aspect to personalization.

The banking industry is no different from any other business where customer service is critical.

You’re the customer so if you don’t fee the institution you are with is meeting your needs then you can move.

For most people, the fees that banks charge are what draws them to a specific bank especially if it’s close to home.

Online Banking

Alternatively, if online banking is the choice of financial management the choices in Canada are plenty.

Two of the top online virtual banking accounts in Canada are Tangerine and Simplii Financial.

We bank with Simplii Financial mainly for the freebies they offer such as free cheques, free e-transfers, and no other fees.

Sometimes you may want to open a second or even third or fourth bank account in Canada but not with the same institution.

That’s fine and certainly a choice that you should make based on your needs.

Opening a USD Bank Account

Recently, we just opened a TD US Savings Account for my online business, this blog as many sponsors pay in US dollars.

We also have a new savings account with TD that we opened to put extra splash money into from our allowances or any extra cash that we earn on the side.

Luckily Mrs. CBB has a TD Visa which meant they already had all of her personal information in the system.

For me, all I had to show was my driver’s licence to open the new bank account.

She used to be with TD bank for over 15 years before she switched to PC Financial which is now Simplii Financial.

In the process, she kept her TD credit card which you can do even if you close a bank account with your branch.

Steps To Complete Before You Close A Bank Account In Canada

However, if you simply want to close a bank account there are a few things you may want to consider doing.

Let’s have a look at the most important 3 steps to close a bank account in Canada based on our experiences.

1. Shop around to find a bank in Canada that meets your needs
2. Open a New Bank Account or bank accounts
   
3. Stop all transactions and auto-payments and move to a new bank account
4. Write a letter to your bank to close a bank account. (If not visiting in person)

When you close a bank account almost all banks will offer to pay you with cash, wire transfer, or a bank draft.

Alternatively, you can withdraw the money yourself if it’s not a massive balance or transfers the cash via e-transfer for free.

Generally to finalize the closure of a bank account will take up to 5 business days but every bank is different.

Close A Bank Account Over The Phone or Online

There might be a way for you to close a bank account without visiting by calling the bank or by secure email.

Depending on your situation they may allow you to close the bank account provided you can supply them with the documents they require.

If you are transferring any money in a bank account to another account with the same bank you can often call or complete the task online.

RBC bank for example will allow you to close a personal bank account online or over the phone provided it’s not a specific bank account they have listed.

• you are not transferring the balance to another RBC account, OR
• if your account is one of the following types:
• Alliance
• RateLink
• V.I.P
• Estate
• Staff
• Joint ‘AND’

Ideally, you should visit your bank’s website to see what the procedures are for closing a bank or call your bank.

Have questions prepared to ask your banking officer if you make the phone call as it can sometimes be tough to get a human on the phone.

Transferring Investments from Bank to Bank

You can transfer your bank investments such as RIF’s, Tax-Free Savings Account, RRSP, and any other investments you have with your bank.

Call your new bank to set up an in-person appointment with a banking officer firstly so they know you are coming.

Ask them what documents you need to provide them with to transfer your investments so you’re prepared.

Your banking officer will fill out a transfer authorization form that you will sign to move your investments.

Also, see if you can get them to pay for the transfer fees that your bank will charge you to move your investments.

Most often the new bank will be more than happy to cover those costs because they want your investment business.

Closing A Personal Loan At The Bank

This is pretty straight-forward if you have a personal loan with the bank you plan to cut ties with.

Pay any outstanding balance in person on the bank loan and advise them that you’d like to close the loan.

Before doing any of the above find a new loan product with your new bank and open that first.

Close A Bank Account Or Leave It Open

Is it bad to close a bank account?

Not at all especially if you don’t plan to use it.

Keep in mind that there may be inactivity fees if you keep a dormant account active.

You’re best to just close it and move on.

How long does it take to close a bank account?

Every financial institution is different but generally, 5 business days is acceptable to close a bank account.

Credit Rating When You Close A Bank Account

Does closing a bank account affect your credit rating in Canada?

No, your bank account is not tied to your credit rating.

How To Write A Letter To Close A Bank Account (Sample template)

How do I write a letter to close my bank account?

If you want to close a bank account via secure email you’ll have to write a letter to your bank.

For example at TD Bank only for personal types, you can carry out closing a bank account online.

Although there are no fees listed to close the bank account TD will continue to charge you bank fees.

For example, if the bank charges you $5.99 a month for your bank account they will continue to do so.

If you do not pay that amount if it goes into overdraft with interest charges they will put your name into collections.

This is general for almost all of the Big 5 Banks in Canada so be cautious of this.

You can download the free pdf or word document for this sample letter here.

Bank Fees To Close A Bank Account

Is there a fee for closing a bank account?

Almost all of the big 5 banks charge fees to close a bank account in Canada and inactivity fees.

TD Canada Trust (TD)

If there is money in the account, it may only be closed by visiting one of our stores or by written request.

When submitting a written request, you must include the account number(s) that you are requesting to close. Additionally, for your security, the letter must be signed and notarized.

If your account is a passbook-type account, please include the passbook with the letter.

Please send your written request to:

TD Bank, N.A
P.O. Box 1377
Lewiston, Maine
04243-1377

• Close your deposit account and transfer the balance to another financial institution $15.
• To Transfer investments to another institution, the fee is $75 per transfer.
• There is no fee for an inactive or dormant account at the 2-year, 5-year, and 9-year mark.

Scotia Bank

Closing Accounts available by:

All accounts can be changed by calling 1-800-4-SCOTIA (1-800-472-6842) or by visiting your Scotiabank branch. To consolidate or close accounts, please visit your Scotiabank branch.

Years Inactive and Fees :
If an account is closed within 90 days of opening it the fee is $20.

• After 2 years of inactivity $20
• After 3 years of inactivity $20
  
• After 4 years of inactivity $20
  
• After 5 years of inactivity $30
  
• After 6 years of inactivity $30
  
• After 7 years of inactivity $30
  
• After 8 years of inactivity $30
  
• After 9 years of inactivity $40
  

CIBC Bank

Closing Accounts available by:

Years Inactive and Fees

• Dormant for 2, 3 or 4 years $20
• Dormant for 5, 6, 7, or 8 years $30
• Dormant for 9 years $40

After 10 years, if your account remains dormant, your Canadian dollar balance is transferred to the Bank of Canada.

Account closed within 90 days of opening it at your request $20

Account Transfer to Other Financial Institution Transfer bank account (by means of a Balance of Account form) Transfer from CIBC RRSP/RRIF/LIF Daily Interest Savings Account/GIC Transfer from CIBC TFSA Tax Advantage Savings Account®/GIC

$19.50 per account $100.00 per transfer $100.00 per transfer

Source: CIBC

Bank of Montreal (BMO)

Closing Accounts available by:

To close an account visit your nearest BMO Bank of Montreal branch or contact us.

To book an appointment at your local branch, return to Online Banking, and select the Book or Manage Appointments link in the Questions box in the bottom left of your screen.

Years Inactive and Fees

If you close an account within 90 days of opening it there is a $20 fee.

If the notice of inactivity is acknowledged within 60 days there is no fee.

After 60 days there is a fee.

• 2-year notice of dormant account $20
• 5-year notice of dormant account  $30
• 10-year notice of dormant account  $40

Royal Bank Of Canada (RBC)

Closing Accounts available by:

The simplest way to cancel Online Banking is to call us at 1 800 769-2511.

We are available 24 hours a day, seven days a week to help you.

If you prefer, you may instead send us a secure message by clicking on “You have messages” or “Go to message centre” at the top of your Online Banking Home page.

To ensure the security of your personal information, you will not receive a confirmation email once online access to your accounts has been discontinued.

Any scheduled payments you may currently have set up through Online Banking will be cancelled.

We recommend that you cancel any unprocessed transactions before asking us to discontinue your online banking service.

There’s a $15 fee for closing your account 16 to 90 days after you’ve opened it, unless it contains a balance that you’re transferring to another RBC deposit or investment account. Please Note: Once the account is closed, the listing will be removed from Online Banking within 30 days.

Years Inactive and Fees

After 2 years until 8 years of inactivity, the charge is $20 a year

At 9 years of inactivity, the bank will charge you $40.

Banking Done Right

It’s important to read the procedures from your bank about how to close a bank account so you ensure it’s done correctly.

If you are unsure how to close a bank account that you own make a phone call to your bank or visit your branch.

Discussion: Have you any experiences you’d like to share with readers of a time that you had to close a bank account?

Share them below.

Mr.CBB

Net Worth Losses and Gains

May 2020

What happened to our money in May?

It looks like we did really well this month. With a gain of over $91,000 in a month, it’s probably the best ever.

Unfortunately, most of the gains were just the financial markets rebounding to somewhere near what they were before COVID-19 hit. In fact, we’re no better off than we were 2 months ago.

To be honest, we’ve used less income because there’s been next to nothing to spend money on during this pandemic.

At least the amount going into cash and savings increased fairly well.

In all, I’m surprised we managed to recover as much so quickly during these trying times.

Understanding Net Worth

What Does Individual Net Worth Mean?

Net Worth is a snapshot of your financial health sort of like a picture or debt to net assets.

In simple terms, it’s a total of the value of your assets minus your liabilities.

We credit the growth of our net worth due to patience, perseverance, using a monthly budget, and not giving up.

Your numbers may go up and down but don’t let the numbers scare you rather understand why and move on.

If you would like to use our budget I offer a FREE downloadable budget which I created and that you can use at home just like we do.

I don’t charge for it because I want you to save money not spend more!

There are tonnes of other free resources at Canadian Budget Binder to help you build your net worth.

Calculate Your Net Worth

Do you know how to calculate your own Net Worth?

We like to calculate our net worth every month so we know if we are still on track.

Some people calculate it yearly or quarterly but it’s up to you and how informed you want to stay.

Net Worth is only an estimate and not everyone uses the same type of figures to tally it up.

Some of you may not include vehicles like we do or leave out assets inside the home as we have.

You might be that person that believes that your house should be excluded.

It depends on what you want to calculate or what you can sell today and make money on for tomorrow.

Figuring out net worth is fairly easy as long as you know your numbers or monthly finances which means you need to do your homework.

Net Worth is simply adding up all your assets (what you own) then taking away your liabilities (what you owe) which will give you a net worth number.

Understanding your net worth will help you determine if you are on track meeting or beating your personal financial goals.

It doesn’t get any easier than that.

Determining Net Worth

How to Determine Net Worth?

Net Worth = Assets – Liabilities

Why not go ahead and calculate your own using our Free Money saving Tool Net worth Calculator (Canadian Budget Binder 2012)

Financial Numbers

When budgeting anything is possible, we are proof of that although we still have a long way to go in our journey.

These are our numbers and our goals, not a means of comparison towards your own goals to others’ target goals.

We don’t care how much money others make or if they have a high net worth or if it is lower than ours as it’s not a competition.

I hope our experiences will help guide you along your financial path working towards debt freedom.

Not everyone has the same path in life.

Some of you may have had to start over like I did or go to school a second time and now have OSAP loans to pay back.

Others may have divorced, lost money in the stock market or other investments, suffered job loss, fell ill or injured on the job and so on but you can’t let that stop you from achieving your financial goals.

Some of you may have been given trust funds, paid-for homes, paid educations, or perks in life that give you a financial kick-start and that’s OK too.

Earn It, Save It, Invest It, Build It

Remember what I said, “It’s not about how much money you make, it’s how you save it”.

The only reason people accumulate wealth is that they know how to save or invest it wisely even if they did inherit money or win the lottery.

The smallest improvements should mean big strides in working towards reaching your goals.

Sometimes we have to fail to learn and we’ve all been there. 

Money can be an evil force for some people especially those who have a negative attitude towards their financial situation.

I urge you to be optimistic and little by little with determination you too should see improvements if you want that to happen.

Canadian Budget Binder Net Worth Updates 2020

Click the links below to read our net worth updates for the year.

• January 2020 Net Worth Update
• February 2020 Net Worth Update
• March 2020 Net Worth Update
• April- Oops I forgot

That’s all for this month’s net worth update but please check in the middle of May 2020 to see how we made out in April 2020 with our financial portfolio.

~Mr.CBB