How To Get Money From A Closed Bank Account

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Like most people, you probably don’t give your bank relationship much thought. That is until it decides to suddenly end its relationship with you. The worst part is that you don’t even know there’s an issue until you swipe your card and it’s declined. 

Realizing your bank closed your account is one of the most frustrating situations but even more so if you had money in the account. No matter what the reason for the bank closing your account is, it is required to return your money. The bank may deduct any unpaid fees or charges from your balance before crediting it to your account.

Reasons your bank account was closed

If a bank closes your account, contact it to find out why and how to get your money back. Some common reasons a bank may close an account include:

  • A negative balance: If you have a negative balance or overdrawn bank account, the bank can close your account. It will typically send you notices alerting you of the balance and insufficient funds. In most cases, it won’t close the account until you’ve paid the overdraft fees and brought the balance out of the negative. 
  • Too many transfers: Savings accounts are limited to a certain number of transfers each year. 
  • Dormant account: Your bank might decide to close your account because there hasn’t been any consistent activity. However, it typically takes several years of little to no activity before a bank closes an account.
  • Zero balance: The bank may close your account if there is no money in it. The length of time depends on your particular bank and its procedures. You also run the risk of having a balance that is below zero because of any monthly fees, so it’s critical to monitor your bank account balances.
  • Excessive transfers: The number of transfers you can make between specific types of accounts, like a checking account and a savings account, is restricted by banks. The bank might close at least one of the accounts if you go over those restrictions. Or if you frequently transfer more money than allowed by Regulation D, your savings account might be changed into a checking account.
  • Suspicious activity: Your bank may close your account if it suspects you are a victim of identity theft in order to stop further fraudulent activity. If the bank believes you are engaging in questionable or illegal activity, such as money laundering, it may also close your account. Among the behaviors that could raise a red flag are large and frequent transfers of money.

What to do if a bank closed your account

When you realize your bank account is closed, follow these steps to gain access to your money: 

Contact the bank

Reaching out to the bank will allow you to learn why the account was closed and what you need to do to receive your funds, especially if you haven’t already received notice of it.

Pause direct deposits and automatic payments

You’ll want to halt all direct deposits to prevent funds from going into an account you can’t currently access. If a closed account receives direct deposit funds, the money may be returned to the sender.

You should also stop all automatic payments so your account doesn’t rack up additional overdraft fees and charges. Review the last 12 months’ worth of bank statements, and make a list of every automatic transaction, including the amount and when it’s typically due or deposited. Because some transactions are infrequent, a full year’s worth of bank statements is required.

Redirect checks

Open a new account as soon as possible and update your direct deposit information with payors. If you can’t immediately open a new account, request a paper check instead. 

Obtain your ChexSystems report

ChexSystems is a banking reporting agency that monitors activity on checking and savings accounts. You can request a report that describes your banking activities and list the causes of any account closures.

File a complaint 

You can also file a complaint with the Consumer Financial Protection Bureau if you’re unable to resolve the problem. After you file a complaint, the Consumer Financial Protection Bureau will contact any business that can help you, ensuring you hear back.

How to claim money from a closed bank account

Your bank may let you know when your account has been closed, but it isn’t legally required to do so.  But the bank must return your money. It can deduct any unpaid fees or charges from your account balance.

Usually, banks issue a check for the balance and will mail it to you. A bank may occasionally close an account and convert it to a different kind of account (usually savings converted to a checking account). If this is the case, you’ll receive a notification. Contact the bank directly to find out its exact procedure for issuing remaining funds from a closed account. 

To get the money from accounts that have been inactive for a while, you might need to get in touch with your state’s unclaimed property office.

Prevent your bank account from being closed 

You can take a few steps to keep your account from being closed involuntarily. 

Check your account balance regularly 

Knowing exactly how much you have in your account is the best way to ensure you don’t spend more than you have. Monitor your account balance and all transactions daily. You’ll also want to look for any errors or charges you may not recognize. If you see anything suspicious or wrong, contact the bank right away to file a dispute.

Understand when deposits become available

Deposits may occasionally be placed on hold by banks, delaying their availability. Sometimes checks can take several days to clear. Just because you deposited funds and see the money in your pending balance, it doesn’t mean the money is really available for spending yet. Familiarize yourself with your bank’s policies so you know exactly when your deposits are available. 

Keep track of automatic payments

If you have automatic payments, such as rent or utilities, keep a record of the dates to ensure you’ve got enough money in the account. You may also want to link your savings account so funds are automatically transferred over if your balance dips below a certain amount. 

Don’t spend money that’s not in your account

Unless you know you have the money, don’t make a purchase. Overdraft fees are costly and add up fast. Don’t make payments if you’re anticipating a deposit, but it hasn’t hit yet. The risk is too costly. 

Use your account 

Avoid letting your account go dormant by using it, even if you don’t use it often. Make a small deposit or small transaction so the account isn’t closed for inactivity. 

Notify the bank before traveling 

If you plan on traveling, you’ll want to let the bank know so that your account isn’t closed because of suspicious activity. A simple phone call is often enough. It’s better to let the bank know than to find yourself in another state or country with a locked bank account. 

Closed accounts don’t mean the end

Although having a bank account closed is upsetting, it can’t legally keep your money unless you owe fees and overdrafts. Your bank relationship may be over, but you should always contact the bank to investigate why it happened before moving on. A closed account isn’t the end of the world – there are plenty of other banks out there willing to give you a chance. 

FAQ

Can you get transactions from a closed bank account?

You can recover your account balance, less any fees owed to the bank even if the account is closed. It’s usually automatic, but you’ll want to contact the bank for the exact time frame and details.

What happens if a bank closes and you have money in it?

The bank will typically issue you a check for the account balance. If there are overdraft fees or bounced checks, those will be deducted from the balance.

Can you retrieve your money after the account is closed?

Yes. You can retrieve your money after the account is closed, even if involuntarily. As long as the account balance isn’t negative, you can get the money in your account.

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