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- Banks can close an account if it’s inactive, has a lot of overdraft fees, or if there’s identity theft.
- You may be able to file a complaint with the Consumer Protection Bureau if it was not your fault.
- You usually cannot reopen a closed account, but you can always open a new one.
Involuntary bank account closures usually occur when a financial institution detects unusual activity in a bank account.
If a bank account has closed your account, here are some steps you can take to resolve any potential issues and avoid this situation in the future.
Why a bank might close your bank account
A bank may decide to close your bank account if any of the following circumstances occur:
- Your account has been inactive for a long time. According to the Office of the Comptroller, financial institutions can consider a bank account abandoned if it has not been used for three to five years. As a result, they will close your bank account and contact you to return any money deposited in your account.
- Large overdraft fees keep piling up. If you avoid paying overdraft fees, a bank may decide to close your account because it is uncertain whether your account is safe.
- A bank suspects identity theft. A bank may think your bank account has been hacked if they notice that you are making large purchases and have not responded to bank notifications. To prevent possible malicious activity, a financial institution will suspend the activity.
What if it wasn’t your fault
Unfortunately, when a bank account is involuntarily closed, it could potentially affect you when you open accounts in the future.
Checking account reporting companies report information about checking accounts. If your account has significant outstanding charges, checking account reporting companies may forward this information to new financial institutions where you may not be able to open a new account. According to the Consumer Financial Protection Bureau, this can affect you for up to seven years after your bank account is closed.
If your account was closed due to identity theft or some other circumstance that was not your fault, you will need to resolve this issue so that it does not affect future accounts.
To resolve an involuntary bank account, the Consumer Financial Protection Bureau recommends that you first review your checking account history by contacting the company on this list.
If you are unable to resolve the problem, the Consumer Financial Protection Bureau also allows you to file a complaint.
Once a complaint is filed, the Consumer Financial Protection Bureau will contact any company that can resolve your issue, so that you get a response. All issues reported to the Consumer Financial Protection Bureau are also stored in a database so the agency can better monitor businesses and enforce laws.
Can you reopen a closed bank account?
In most cases, once a bank account is closed, it cannot be reopened. You will need to open a new bank account with your institution or bank elsewhere if you are unable to find an account that interests you. If you want help finding the right place for your money, Insider has a list of the best banks and savings accounts.
How to maintain a new bank account
When you open a new bank account, you’ll need to monitor it to make sure you don’t end up in the same situation. Here are some tips for maintaining your new bank account so it doesn’t get closed by a financial institution.
- Find a new account for which you will be eligible. If your account was closed because you had to pay large overdraft fees, you can still open a new account. Low-risk bank accounts, prepaid debit cards, and free overdraft protection are worth exploring.
- Add direct deposit to your account. To avoid inactivity on your account, you may consider adding direct deposit to your account so that money is automatically credited to your account each month.
- Use a budget app that will be linked to your bank account. If you want an overview of how you’re spending your money, an app (we’ve tested and rated the best budgeting apps) can also help you monitor your account.