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Can I Reopen A Closed Bank Account?

Last modified: Sep 29, 2022

If you have a bank account that you haven't used for a while, you may be wondering if it's still open. If it is not, can I reopen a closed bank account?

But why would your bank close your account in the first place?

Keep on reading to find out more!

Can a Closed Bank Account Be Reopened?

If you have a closed bank account in the US, it may be possible to reopen it depending on the reason it was closed.

To reopen a closed bank account, you'll need to provide all the required documentation (ID, proof of address). Once you've contacted the bank and requested to reopen your account, you'll likely be required to come to the branch and fill out some paperwork. After that, you should be able to access your funds and use your account just as you did before it was closed. Practices may differ depending on the types of banks.

If you have difficulty getting your closed bank account reopened, you may consider opening a new one instead. You can do it at most banks and credit unions, and you won’t need to provide a reason for doing so.

Read more: How Old Do You Have to Be to Open a Bank Account?

Why Would a Bank Close Your Account?

If you've ever had your bank account closed, you've probably asked yourself, "Has my bank closed my account for any suspicious activity?" or "Is my bank account closed due to overdraft?". Let's look at some of the most common reasons why it may happen:

Inactive Account

If you don't use your bank account for an extended period, your bank may close it. This usually happens if you have a zero balance for an extended period or you haven't used your account for a while. 

Inactivity can be costly to a bank, so it may decide to close your account to avoid losing money. If your bank account is closed, you may lose access to your funds and no longer be able to use your debit card or write checks. 

Avoiding these penalties is easy: keep your account active by using it regularly. This can be as simple as making a small purchase with your debit card or transferring money into your account each month.

Piled up Overdraft Fees

An overdraft occurs when you don't have enough money in your account to cover the transactions you've made. If you do this often, the bank may decide to close your account because it sees you as a high-risk customer who is more likely to default on their account.

The overdraft can also signify that you're struggling to manage your finances.

Risky Accounts

When a bank detects that an account is displaying risky behavior, it will keep an eye on it. If the account holder continues to behave in a risky manner, the bank may eventually decide to close the account.

There are a few reasons why an account might be considered risky: 

  • If the account holder frequently overdrafts their account or makes late payments
  • If the account holder has a history of bounced checks or making fraudulent charges

Fraudulent Activity or Identity Theft

According to the Federal Trade Commission (FTC), around 9 million US citizens have their identities stolen every year.

If your bank discovers clear indications of fraud, it may close your savings or checking account. In the case of suspicion that an account is connected with fraudulent behavior, the bank may freeze or even shut it entirely. 

The most common fraudulent activities are:

  • Making surprisingly large direct deposits.
  • Creating numerous accounts with the same name.
  • Getting large sums of money from foreign accounts.
  • Making large and frequent transactions when you don't have a track record of employment.

If your bank suspects that your account has been compromised, it may close it as a precautionary measure. This can be frustrating, but it's important to remember that your bank is trying to protect you from further fraud.

What Steps Should You Take After Reopening Your Account?

There are a few things that you can do that might help you reopen your account.

Inactive Accounts

You can frequently reopen an inactive account by making an online transfer within a certain time. Some banks will ask you to submit a request to reopen the account. This should be accompanied by making a direct deposit.

Negative Balance

The bank's policy is the only thing that will determine whether or not you can re-open a closed account with a negative balance.

The first step is to check with your bank's customer service department to see if it's possible to re-open your account. If the bank allows it, it may require you to pay off the entire negative balance before reopening your account.

If the bank doesn't allow you to reopen your account, then you'll need to open a new account at a different bank. Once you have a new account, you can work on rebuilding your credit by making timely payments and keeping your balance low.

Fraudulent Activity

If your bank thinks that there might have been some fraudulent activity on your account, it will file a Suspicious Activity Report with the Department of Treasury. If this happens, you won't be able to reactivate the account. In fact, other banks might not permit you to open a new account after that.

The good news is that, in most cases, your bank will inform you before reporting your account for fraud. You might prevent the closure of your account by proving that all payments are yours and valid.

But even then, the bank may still terminate your account if it thinks you are a high-risk client. So make sure that you make reasonable deposits.

How to Get Money From a Closed Bank Account

If you have a closed bank account, there are a few ways to get your money back. 

One way is to contact the bank directly and ask if it can provide you with a cashier's check or money order for the amount of money in your account. 

Another way is to go to your local branch of the bank and speak with a teller. They may be able to provide you with a cashier's check or money order as well. 

Finally, you can contact the FDIC (Federal Deposit Insurance Corporation) and ask if it can help you get your money back. The FDIC is a government agency that insures bank deposits, so it may be able to help you if your bank can’t.

Read more: How to Withdraw Cash From Your Credit Card Without a Pin?

Does Closing a Savings Account Affect Credit?

No, closing a savings account will not affect your credit. Savings accounts are not reported to the credit bureaus, so they will not be factored into your credit score. Your credit score is based on your credit history, which is a record of your borrowing and repayment activity.

However, if you have a joint savings account with someone who has bad credit, that account may be flagged as high-risk by the credit bureaus. This could potentially negatively affect your own credit score.

Read more: How to Build Credit – An ultimate guide.

Bottom Line

When a bank account is closed, it can be difficult to reopen it. In most cases, you may be able to reopen it by contacting the bank directly.

The reasons your bank account gets closed vary. Whether it's due to inactivity, a negative balance, or fraud — if you act fast, your account could be up and running again in no time.

We hope that this article helped, and thanks for reading!


Can You Close a Bank Account With a Negative Balance?

No. If you want your bank to close an overdrawn account, you will need to pay the balance on the account first. If you don't, the bank may refuse to close the account.

Can a Bank Reopen a Charged Off Bank Account?

Unfortunately not. An account that has been charged off cannot be reactivated.

Bank Closed My Account. Can I Open Another One?

It depends on why your account was closed in the first place. Get in touch with your bank to know more.

What to Do When You Send Money to a Closed Bank Account?

Often, banks will notice that you’re sending money to a closed account. In this case, direct deposits will be declined or returned to the sender. But consider contacting your bank as soon as possible to know the details.

Policy Advice is a website devoted to helping everyday people make, save, and grow money. While our team is comprised of personal finance pros with various areas of expertise, nothing can replace professional financial, tax, or legal advice.

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