Miriam Caldwell has been writing about budgeting and personal finance basics since She teaches writing as an online instructor with Brigham Young University-Idaho, and is also a teacher for public school students in Cary, North Carolina.
Janet Berry-Johnson is an expert in taxes and accounting whose expertise is based in a year career as a certified public accountant. One of the most frustrating experiences is when your bank closes your account. It is important to realize that just as you can choose which bank you do business with your bank can also choose not to do business with you. There are laws in place that prevent banks from closing accounts based on things like race, but if you are a poor customer and your account goes delinquent, then it can close your account.
As soon as you receive notice that your bank has closed your account, you need to take immediate action in order to be able to continue to pay your bills and manage your money. If you do not, your paycheck may go to the bank, but you will not be able to access the funds. The bank may keep them to help cover your negative balance, since you still owe them that money.
The best way to avoid having your account closed is to avoid a negative balance. Even if your account offers overdraft services , you will be paying a lot in overdraft fees, and you may become trapped in an overdraft cycle where more and more of your paycheck goes towards the overdraft fees. Keeping a running balance of your account, and spending only the money that you have in the account will protect you from finding yourself in this situation.
If you have started an overdraft cycle, you will need to break it. You can do this by cutting back on your spending, and possibly speaking with your bank about a schedule to pay back the fees so you can still afford groceries and to pay your rent during the week. You may need to consider selling something or taking on extra work in order to recover from being overdrawn. You need to be proactive until you fix the situation. It goes without saying that there are numerous benefits of having a bank account.
In fact, most people have multiple bank accounts. However, at times, a person may want to close their bank account for reasons such as bad experience with the staff, migration to another state or country, etc. But decided to close the account, and it will be close in a blink of an eye, is not the case. If you want to close your bank account, you have to follow certain process and steps:. Once the formalities have been taken care of your account will be closed permanently and the remaining balance if any will be sent to you.
Any closure of the account after 14 days but before 1 year may be subject to account closure charges. Normally, closure of an account after 1 year is not subject to closure charges. Note: If your current balance in the said bank account is above zero then you will get it back. Do provide an alternate bank account number so that the standing instructions for your EMIs or investments are not disturbed.
Some platforms may ask you to fill a de-linking form. You may also be asked to fill a separate form mentioning the account number to which the balance funds need to be transferred. Typically, banks ask you to return the unused cheque books, debit and credit cards, passbook and any other documents issued by the bank. You will have to surrender all these with the account closure form. In some cases, the bank could also ask you to destroy these documents by yourself.
Note that most banks levy an account closure fee if you close it within a year from opening. SBI, for example, does not levy a closing fee if you close the account within 14 days of opening it. Though regulated by the Reserve Bank of India , banks are free to levy any closing charges as per their financial situation. So some banks may charge a slightly higher account closure fee compared to others while some might completely waive it off.
Once all this is done, the bank will check for any pending charges associated with the account. Ask the bank for an acknowledgement stating closure of the account.
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