You can stop interest from accruing, but the method depends on your bank and account type

Most banks will not let you turn off interest earnings on a savings account—they straightforward deposit it automatically. However, you have real options: move money to a non-interest account, request a transfer to a checking account that earns no interest, or close the savings account entirely and keep funds elsewhere. Some banks offer money market accounts or certificates of deposit (CDs) where you control when interest compounds. The reason you might want to stop interest is usually tax-related (interest counts as taxable income) or because you are managing funds for someone else under specific rules.

The fastest route is to call your bank's customer service line and ask whether they offer a checking account with no interest feature, or whether you can move your balance to one. If your bank cannot accommodate this, you can open an account at a different institution that offers non-interest checking. This takes one to three business days to set up.

Key Takeaways

  • Banks do not typically allow you to disable interest on savings accounts—interest deposits automatically and you cannot stop them at the account level.
  • You can move money to a checking account (which usually earns no interest) or to a different bank that does not pay interest on the account type you choose.
  • Interest earned on savings counts as taxable income on your federal tax return, which is why some account holders want to avoid it.
  • If you are managing money for a minor or under a legal arrangement, confirm with your bank or a tax professional whether interest affects your situation before moving funds.

Why banks will not let you turn off interest

Interest is how banks attract deposits. Turning off interest on a savings account would defeat the purpose of the account from the bank's perspective, so they do not build that feature in. The interest rate itself may be very low (sometimes under 0.01% annually), but the mechanism is automatic—once money sits in the account, the bank calculates and deposits interest on a schedule, usually monthly or quarterly.

You cannot call and ask the bank to stop paying you interest on an existing savings account. What you can do is move the money out of that account type entirely. This is a real solution, not a workaround.

Moving money to a non-interest checking account

Most checking accounts earn no interest. Open a checking account at your current bank or a different one, then transfer your savings balance to it. The transfer itself takes one to three business days. Once the money is in checking, no interest accrues.

Call your bank and ask: "Do you have a checking account that earns no interest?" The answer is almost always yes. Ask whether you can open one online or in branch, and whether there are monthly fees (many banks waive fees if you maintain a minimum balance or set up direct deposit). Once the account is open, you can move money from savings to checking through your online banking portal or by visiting a branch.

If your current bank charges fees on checking accounts or requires a high minimum balance, compare options at other banks. Credit unions often offer free checking with no interest and no minimums.

Closing the savings account and keeping funds elsewhere

If you want to stop interest entirely and do not need the account, you can close it. Contact your bank, confirm there are no early closure fees (most savings accounts have none), and request closure. The bank will send any remaining balance to you by check or transfer it to another account you specify.

Once closed, the account generates no interest. This works if you plan to keep the money in a different form—cash at home, a checking account at another bank, or a money market account where you control deposits and withdrawals.

Tax implications of interest income

Banks report interest earnings to the IRS on a Form 1099-INT if you earn $10 or more in a calendar year. You must report this interest as income on your federal tax return, even if the amount is small. This is why some people want to avoid interest—they are trying to keep their reported income below a certain threshold, or they are managing funds for someone else and do not want to trigger tax reporting.

If you are concerned about tax consequences, speak with a tax professional or accountant before moving money. They can tell you whether stopping interest will actually change your tax situation, because the answer depends on your specific circumstances.

Special situations: guardianship, trusts, and minor accounts

If you are managing money for a minor, in a guardianship, or holding funds in a trust, interest may have legal implications. Some arrangements require that interest be handled a certain way—it might need to go to the minor when they turn 18, or it might be considered part of the estate. Before you move money to stop interest, confirm with the bank whether the account has restrictions, and ask a lawyer or the person who set up the arrangement whether stopping interest is allowed.

For custodial accounts (accounts you hold for a minor), the bank can usually tell you in one call whether interest is required or optional. Get that answer in writing if possible.

Frequently Asked Questions

Will closing my savings account hurt my credit score?

No. Closing a savings account does not affect your credit because savings accounts do not appear on your credit report. Only credit accounts (credit cards, loans, lines of credit) show up. You can close a savings account without any impact on your credit.

Can I move money to a savings account at a different bank that pays even less interest?

Yes, but you will still earn some interest—it just may be lower. If your goal is to earn zero interest, a checking account is more reliable because most checking accounts earn nothing. If you want to compare interest rates across banks, visit Bankrate or the FDIC's BankFind tool to see what different institutions offer.

What if my bank says they cannot open a non-interest checking account?

Switch banks. Credit unions, online banks, and regional banks almost always offer free checking with no interest. You can open an account online in minutes at most institutions. Once it is open, transfer your money from your current bank and close the savings account there.

Does moving money to a money market account stop interest?

No. Money market accounts are savings products and they earn interest just like savings accounts do. If you want to stop interest entirely, use a checking account or keep cash outside the banking system.

If I earn interest before I close the account, do I have to report it?

Yes. Any interest earned in a calendar year must be reported on your tax return, even if you close the account later that year. The bank will send you a Form 1099-INT showing what you earned. Talk to a tax professional if you are unsure how to report it.