The basic steps to convert a business or joint account to personal
Switching back to a personal account depends on what type of account you currently have. If you have a business account, you'll need to close it and open a new personal account — most banks won't straightforward convert the account type. If you have a joint account and want to remove the other person, you'll typically need their permission and signature, or you may need to close the joint account and open a new one in your name alone. The exact process varies by bank, so your first step is to call or visit your bank and ask what they require for your specific situation.
Banks keep these rules in place because business accounts and joint accounts have different legal structures and tax reporting requirements. A business account is tied to a business license or tax ID number, while a personal account is tied only to your Social Security number. A joint account legally belongs to both people on it. You can't straightforward erase that legal relationship — you have to formally end it.
Key Takeaways
- Business accounts cannot be converted to personal accounts; you must close the business account and open a new personal one.
- Joint accounts require both account holders to agree to the change, or you must close the joint account and open a personal account separately.
- Contact your bank directly to learn their specific process, as requirements vary between institutions.
- You will need to decide what happens to any remaining balance and set up direct deposits or transfers to your new account before closing the old one.
- Some banks charge a fee to close an account early, so ask about this before you proceed.
Closing a business account and opening a personal one
If you have a business checking or savings account, your bank will not change it to a personal account. Instead, you'll close the business account and open a new personal account. Before you do this, make sure any automatic payments or deposits tied to the business account are moved to your new personal account. This includes paycheck direct deposits, bill payments, or transfers from other accounts.
Call your bank's business account department or visit a branch and tell them you want to close the account. They will ask what you want to do with any remaining balance — you can transfer it to a new personal account at the same bank, or withdraw it as a check. Ask whether there is a fee for closing the account early. Some banks charge a small fee if you close within a certain time frame (often 90 days to a year), while others do not. Once the account is closed, you can open a new personal account right away, often at the same visit or appointment.
Removing yourself from a joint account
If you have a joint account and want to remove yourself from it, the other account holder will keep the account and all the money in it. This is different from wanting to remove the other person — that requires their permission. To remove yourself, contact your bank and ask to be taken off the account. Some banks allow this without the other person's signature, while others require written permission from both of you. Ask your bank which applies to you.
Once you are removed, you lose access to the account entirely. Make sure you have moved any money you need to a personal account first, and that any direct deposits or automatic payments have been switched over. The other person will still have full access and control.
Removing the other person from a joint account
If you want to keep the account but remove the other person's name from it, you will need their signature and permission. Call your bank and ask what form they require — it is usually called a "removal request" or "account modification form." Both of you will need to sign it, and you may need to do this in person at a branch. Some banks will not allow one person to remove another without that person's consent, even if you are the primary account holder.
If the other person refuses to sign or you cannot reach them, your only option is usually to close the joint account entirely and open a new personal account. Before you close it, make sure you know what will happen to the money in the account — typically, you and the other person each have a legal claim to the full balance, so closing the account may require both signatures anyway. If there is a dispute over the money, you may need to speak with a lawyer.
What to do before you close the old account
Before you close any account, take these steps in order. First, set up a new personal account at your bank or elsewhere. Second, change your direct deposits — contact your employer's payroll department and give them your new account number and routing number. This usually takes one to two pay periods to take effect. Third, update any automatic bill payments or transfers. Log into each service (your utility company, insurance company, loan servicer, and so on) and change the account information there.
Fourth, transfer any remaining balance from the old account to the new one. You can do this online, by phone, or in person. Fifth, wait at least one full pay cycle to make sure everything has switched over correctly and no payments are still trying to hit the old account. Once you are confident, you can close the old account. Keep a record of the account number and closing date in case you need to reference it later.
Fees and timing for closing accounts
Some banks charge a fee if you close an account within a certain period — often 90 days to one year after opening it. The fee is usually between $25 and $100. Ask your bank whether this applies before you close. If you are switching because of a problem with the account or the bank, some banks will waive the fee if you ask. It never hurts to ask.
Closing an account usually takes one to three business days. The bank will send you a confirmation letter with the closing date and what happened to any remaining balance. Keep this letter for your records. If you had checks printed for the old account, do not use them after the account is closed — they will bounce.
What happens to your credit and banking history
Closing a bank account does not affect your credit score. Bank accounts are not reported to credit bureaus the way loans and credit cards are. However, if you had overdrafts or unpaid fees on the old account, those may show up on your banking history report, which some banks check when you open a new account. If you owe the bank money from the old account, they may take it from your new account or send you to collections.
When you open a new personal account, the bank will run a background check using ChexSystems, a banking history database. If you have a history of bounced checks, overdrafts, or closed accounts due to fraud, some banks may deny you or require a deposit. If this happens, you can still open an account at a community bank or credit union, which often have more flexible policies.
Frequently Asked Questions
Can I convert my business account to a personal account without closing it?
No. Banks require you to close the business account and open a new personal account because they have different tax reporting structures and legal requirements. The process usually takes a few days, and you can often do both at the same time.
What if the other person on my joint account won't sign the removal form?
If they refuse to sign, you cannot remove them from the account. Your only option is to close the joint account entirely and open a new personal account. This may require both signatures if there is money in the account, so you may need legal help if there is a dispute.
Will closing my account hurt my credit?
No. Closing a bank account does not affect your credit score because banks do not report account closures to credit bureaus. However, unpaid overdrafts or fees may appear on your banking history, which some banks check when you open a new account.
How long does it take to close an account and open a new one?
Closing usually takes one to three business days. You can open a new personal account when ready, often at the same visit. However, it takes one to two pay periods for direct deposits to switch over, so plan ahead.
What if I have automatic payments set up on the old account?
You must update each automatic payment before you close the account. Log into each company's website or call them and provide your new account number and routing number. Do this at least one week before closing to make sure the change takes effect.