How To Reopen Closed Bank Account?


Closed Bank Account

Banks are fond of closing their customers’ bank accounts, and there are several reasons why they do this. A bank can close your bank account if you rarely use the account, if they suspect that your relationship with them may put them in danger, if you have a low balance, etc. A bank can close your bank account for any reason; anytime they deem fit. They aren’t bounded by law to stick with you forever. So, in the event that your bank closes your account for reasons you don’t buy, can you reopen it?

It is impossible to open a closed account, especially one close for overdrafts or suspicious transactions. However, it is possible to open or activate a dormant account. All you have to do is perform any credit or debit transaction.

Banks have the right to shut your account, just as you have the right to switch banks. If your bank believes that you are a huge liability, they will shut your account, and you may be unable to do anything regarding the issue. If your bank account is shut due to fraudulent activities, the account is gone—you won’t be able to reactivate the account. However, if it is shut because you failed to use it for a long time, you should be able to reopen it. Stay glued to find out more about this discussion.

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How To Reopen Closed Bank Account?

Banks can shut your account for several reasons. These reasons vary from a history of bounced checks, negative balance left unsettled, relationship with high-risk industries, or inactivity. Funny enough, some of these banks can close your accounts without giving you prior notice. So you could find out that your account has been blocked while trying to pay for some goods you bought or a hotel reservation. Of course, such an incident can be pretty annoying. However, that is banks for you!

Let us look at the main reasons why a bank could close your account and the tendency of getting it opened.

Closure Due To Inactivity:

Banks will designate inactive bank accounts (those that haven’t been used to perform a transition for a long time) as dormant and would go ahead to shut them as they are costly to maintain.

Dormancy is slightly different from account closure because a dormant account still exists, but it cannot be used. Such accounts cannot be used to make new transactions, internet banking, check requests, etc. After a long period, your bank will transfer the money in your account to the state government, and it would be tagged “Unclaimed property.” This can occur if you haven’t made a transaction with the account for three to five years.

If your bank transfers the money in your dormant account to the state, you can get them back by reaching out to your state treasury or unclaimed property office and tender a claim.

How To Reopen the Account?

Reopening accounts closed for inactivity is pretty straightforward. All you need to do is make a transaction (deposit or withdrawal) within a period. However, you may want to contact your bank to ensure that your transaction is enough.

Banks may contact you regarding an inactive account before reclassifying it as dormant. That heads-up will include info regarding how long you have to reactivate the account.

Closure Because of Too Much Overdraft:

When you make transactions or payments from your account that is more than the money in the account, you will overdraw the account. This means that you will have a negative balance. Your bank will close your account if its stays that way for around 30 days, three months or more (depending on the bank). Check your bank’s deposit account agreement to find out more information regarding how long you can have a negative balance.

How To Reopen the Account?

The possibility of you reopening an account closed due to overdrafts depends on the bank’s policy. Generally, suppose your account was closed because the balance has been negative for a long time. In that case, you can reopen it by paying the negative balance, which typically includes your transactions and overdraft fees for items that bounced.

In some instances, the bank will let you open a savings account if your checking account has been shut because of too much overdraft.

Closure Because of Suspicious or Fraudulent Activity

This is one massive turnoff for banks. A bank will shut your accounts (savings and checking) if it finds out that it suspects that it is being utilized for fraudulent activities like money laundering, internet fraud, etc.

How To Reopen the Account?

Sorry. Accounts closed because of suspicious fraudulent activities cannot be reopened, especially after your bank files a Report with the U.S. Dept. of the Treasury. In addition to not being able to reactivate the account, you may not be able to open another account in a different bank.

But, since banks inform you before shutting your account, you may be able to solve the issue before your account gets shut. If you can persuade the bank that your account was used in the right way, you may be able to retain the account. However, if you can’t, you’ll have to kiss the account goodbye.

How To Get Money From a Closed Bank Account?

Will a Direct Deposit Reopen a Closed Account?

Banks are charged with protecting their customers and themselves. This means that a bank will do all it can to ensure that your funds are safe. In addition, a bank will also do all it can to ensure that it isn’t serving any client that poses as a liability. That is why banks close accounts. If your bank account is closed for one reason or another, you would surely want to reopen it. And one of the numerous methods you may want to consider is a direct deposit. However, can a direct deposit do such?

A direct deposit wouldn’t be able to open a closed account, especially one closed due to suspicious or fraudulent activity. However, a direct deposit should be able to open an account closed due to inactivity.

If your account was closed due to inactivity, you could reopen it by making a transaction within a period. This transaction includes deposits or withdrawal. Ensure you contact your bank to determine if the transaction is enough.

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