Banks reserve the right to close, temporarily restrict, or stop you from opening an account with them. In terms of blocking an account, a bank can block your account for many reasons, including inactivity, suspicious transaction, zero balance, etc. But come to think of it, can banks see the accounts they close?
Banks can see all closed accounts since they are the ones who are closing the accounts in the first place. It’s impossible for them not to have access to such information.
What can banks see regarding your account? Can they see closed accounts? Why do banks close customers’ accounts? I have covered all these below. As a bonus, I have also included tips on how to know when your account is closed.
Can Banks See Incoming Deposits?
Can Banks See Closed Accounts?
When a bank closes your account, you may not know until you decide to make a transaction. But what about your bank? Do they know when your account is closed? Can they see it?
Of course, banks can see closed accounts since they are the ones who closed the account. Mind you; these banks can close your account anytime they like, just as you can close your account with them whenever you want. However, you trust banks to close your account for the right reasons.
Let’s understand why banks close individual accounts in the first place.
Reasons Why Banks Close Accounts:
- Dormant account
Let’s assume you haven’t written a check in the past two to three years or have made just two debit card transactions in the past two years. Your bank may close your account due to the lack of activity. Typically, it takes a few years or little or no activity for a bank to close your account.
Generally, a bank considers an account ” dormant” if the account holder doesn’t conduct any activity on the account for over two years or if the account holder hasn’t contacted the bank during that period. The bank is often required to reach out to the account holder if it decides to pull the plug on the account. If the account holder doesn’t claim the money in an ignored account, the money may be turned over to a state’s unclaimed property program.
- Zero Balance
If your account is empty, the bank may shut it. Simply because an account has no minimum doesn’t mean it should gather dust or remain empty for long. The time frame will defer based on your bank and its rules. Another risk you take is that any monthly fees could take your balance to below zero, so it’s crucial to monitor your bank account balances.
- Bounced Checks or Overdrafts
Your bank may shut your account if you have accumulated many bounced checks or overdrafts. When you often bounce checks, your bank may decide to close your account.
In the case of overdrafts, when your bank lends you money for a transaction, even though there isn’t adequate money in your account, your bank may not close the account until you have enough to settle the overdraft and any overdraft fees.
Once that happens, the bank might shut your account. Overdrafts can occur when you write a check, make a debit card payment, or carry out an ATM transaction that throws your account into the negative.
- Excessive Transfers
Banks limit the number of transfers you can initiate between some types of accounts, like checking and savings accounts. If you surpass those limits, the banks may shut at least one of the accounts. Or, in the case of a savings account where you continuously surpass the Regulation D transfer limits, it could be converted into a checking account instead.
- Suspected Identity Theft
If your bank discovers you have been the victim of identity theft, it may shut your account to safeguard your money. The bank might also close your account if it suspects you are embroiled in an unscrupulous activity like money laundering. Large and regular transfers or withdrawals of money are some actions that may trigger bank systems and force them to scrutinize the transaction.
- Criminal Conviction
If you have a previous criminal conviction that you chose to hide from your bank and the bank discovers it, it might close your account. Your account could also be shut down if you are convicted of a crime after opening your account.
- High-risk Occupation
Your bank may pull the plug on your bank account if you enter into a business that is considered risky. This may be gun sales, marijuana sales, online gambling, or escort services.
- Changes at the Bank
If your bank moves away from your state, closes its branches in your area, or exits the banking industry altogether, it may decide to shut your account.
Can You See What Was Purchased on a Credit Card?
How to Know if Your Account Has Been Closed?
Did your bank close your account? No? Yes?
Rather than guess, why not find out.
And how do you do that?
The easiest way to determine if your account has been shut is by calling your bank. You’ll need to provide info to confirm your identity. The information can include your name, address, phone, Social Security number, PIN, account number, and security questions (like your mother’s maiden name).
