![]() ![]() Particularly if you haven’t already been notified of the closure, reaching out to the bank will enable you to find out why the account was closed and what you need to do to receive your funds. Here are seven steps you should take when your bank has closed your account: What To Do When Your Bank Has Closed Your Account If your bank stops doing business in your state, shuts down branches in your area or exits the banking business altogether, it may very well close your account. This may include gun sales, marijuana sales, online gambling or escort services. High-Risk OccupationĪ bank might close your account if you get into a business that’s deemed high risk. Your account could also be closed if you’re convicted of a crime after opening your account. If you have a previous criminal conviction that you didn’t report to your bank, but the bank then finds out about it, the bank might close your account. Large and regular transfers or withdrawals of money are among the actions that may raise a red flag. The bank also might shut down your account if it suspects you’re committing suspicious or illegal activity, such as money laundering. ![]() If your bank thinks you’ve been the victim of identity theft, it may close your account to prevent further fraudulent activity. Or, in the case of a savings account where you repeatedly exceed the Regulation D transfer limits, it could be converted into a checking account instead. If you exceed those limits, the bank might close at least one of the accounts. Too Many Transfersīanks impose limits on how many transfers you can make between certain types of accounts, such as a checking account and savings account. Overdrafts can happen when you write a check, make a debit card payment or carry out an ATM transaction that sends your account balance into negative territory. Once that happens, the bank might close your account. In the case of overdrafts-when your bank covers transactions, even though there’s not enough money in your account-your bank likely won’t close your account until there’s enough money in it to at least pay for the overdrafts and any overdraft fees. When you repeatedly bounce checks, your bank likely will shut down your account. If you’ve racked up too many bounced checks or too many overdrafts, your bank may close your account. Another risk you take is that any monthly fees could reduce your balance to below zero, so it’s important to keep tabs on your bank account balances. The time frame will vary based on your individual bank and its practices. Simply because an account says there are no minimums, does not mean the account should remain empty for days or months. If your account contains no money, the bank might close it. If money in an abandoned account goes unclaimed by the account holder, the cash may be turned over to a state’s unclaimed property program. The bank is usually required to contact the account holder if it decides to close the account. Generally, a bank considers an account “abandoned” if the account holder fails to initiate any activity over a three- to five-year period, or if the account holder hasn’t contacted the bank during that time. Typically, though, it takes several years of little to no activity for a bank to pull the plug on an account. Your bank may decide that because of the lack of regular activity, it’s going to close your account. Let’s say you haven’t written a single check in the past two years or have made only two debit card transactions in the past three years. Your bank may shut down your account for several reasons. In some cases, your bank may close an account and switch it to a different type of account. The returned money likely will come in the form of a check. The bank is required, however, to return your money, minus any unpaid fees or charges. Your bank may notify you that it has closed your account, but it normally isn’t required to do so. What Happens When a Bank Closes Your Account?
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