What Happens When You Close a Bank Account with Money in It?

When you decide to close a bank account that still has funds remaining, it's important to understand the steps involved to ensure a smooth and hassle-free process. This article will guide you through the typical procedures, potential fees, and the impact on your credit score.

Withdraw Funds

Before you close your bank account, you should always aim to withdraw or transfer all remaining funds. This step is crucial to avoid any discrepancies and to ensure that you have control over your money. However, some banks may require that the account be closed with a zero balance. For instance, some institutions may charge a closing fee if the account has been open for less than a certain period, often within the first 90 days after opening.

Account Closure Process

How you close a bank account can vary depending on the bank's policies. Generally, you have several options:

In Person: Visit a bank branch and follow the bank's procedures for closing an account. You may be required to provide identification and sign forms. Over the Phone: Many banks allow you to close your account over the phone by calling the customer service number. Make sure to have all necessary information handy. Online: Some banks offer an online account closure option. Check their website for specific instructions.

Final Transactions

Before closing your account, ensure that all pending transactions are resolved. This includes any outstanding checks, automatic payments, and any other financial obligations. Unresolved transactions can lead to fees or other complications.

Confirmation of Closure

After the account is closed, it's important to request a written confirmation from the bank. This documentation can be useful for your records, especially for tax purposes or if you need to dispute charges in the future.

Potential Fees

Some banks may charge a fee for closing an account, especially if it is done within a certain timeframe after opening. For example, the fee may be applied if the account is closed within the first 90 days. Always check your bank's policy to understand any associated fees.

Impact on Credit

Closing a bank account typically does not affect your credit score as bank accounts are not usually reported to credit bureaus. However, it's wise to keep your credit history as clean as possible by maintaining responsible financial practices.

Access to Funds

If you have not yet withdrawn or transferred the remaining funds, the bank will typically issue a check for the balance or transfer the money to another account you hold with them, based on their policies. If the remaining balance is significant, it may take several days for the bank to prepare and mail the check.

What to Do If the Bank Refuses to Provide Funds

There are instances where you might encounter difficulties in closing an account or receiving the remaining funds. For example, Bank of America might refuse to issue funds if they claim there was fraud on your account, even if you deny it. In such situations, you should:

Review the bank's claims carefully and gather any evidence that refutes their allegations. Contact your bank to discuss the situation and seek a resolution. Consider escalating the issue to a higher-level bank representative or the Federal Deposit Insurance Corporation (FDIC) if necessary.

Remember, if a bank falsely claims fraud, it could lead to complications such as the bank requesting sensitive information like your mother's maiden name to verify your identity. Such actions can be concerning and should be handled carefully, as they can affect your ability to open or maintain bank accounts in the future.

Always check with your specific bank for their procedures and any potential fees associated with closing an account. Keep detailed documentation of all interactions with the bank to support any claims or disputes you might need to address.