If Your Bank Account Gets Closed, Can You Reopen It?

Closed Bank Account

Once you become fed up with your bank’s services, you can decide to end your relationship with the bank and open another bank account with a different bank. In the same vein, a bank can end its relationship with you anytime, any day. You could wake up one chilly morning to discover that your bank has closed your account. Or you could find out when trying to make a transaction. If a bank closes your account for reasons that don’t sit well with you, you’ll definitely want it reopened. However, is such possible? Can you reopen a shut account?

It is not possible to open a closed account, particularly one closed for illegal activities like money laundering or terrorism-related offences. However, it is possible to reopen a dormant or inoperative account.

Banks have the authority to close your account whenever they deem fit, the same way you can change banks whenever you like. A bank can decide to close your account for several reasons. These reasons range from overdraft, inactivity, illegal activities, bad behavior towards staff, etc. Most times, banks alert their customers before closing their accounts. However, in some situations, they don’t. If your account was deactivated and you are looking for answers regarding how to reopen the account. Or if you want to know if such an act is possible, this article is for you.

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If Your Bank Account Gets Closed, Can You Reopen It?

Banks would always protect themselves, including the funds of their customers. Banks protect the funds of their customers by temporarily closing their accounts in the event of suspicious activity. For instance, if you withdraw a huge amount of money from your bank account, that is, one that you haven’t withdrawn before, your bank may block your account temporarily. There are a lot of activities that trigger banks’ security systems. When this system is triggered, your account could be deactivated temporarily to ensure that your funds are safe.

In addition, if your bank discovers that you could be a huge liability, they will close your account. For instance, if your account is used to launder money or finance an illegal activity, your bank wouldn’t hesitate to close it. Even if your bank isn’t sure yet, it may close your account before conduction preliminary investigations to determine if you have broken any of their rules.

In the event that your account was shut for one reason or the other, you would be eager to know if reopening it is possible. You see, reopening a closed bank account is not possible, especially if it was shut because you displayed a pattern of overdrafts or suspicious transactions. However, if your account was shut due to inactivity, you can open it by simply initiating a new transaction.

Let us consider some of the primary reasons why banks shut people’s accounts and the possibility of reopening them.

Bank Account Closure Due to Lack of Activity:

Banks will designate an account (those that haven’t been used to perform a transaction for a long time) as dormant and will close the account as they are expensive to maintain. A dormant account is not similar to a closed account. A dormant account is an account that is still active but cannot be used. A closed account, on the other hand, cannot be used. It is impossible to perform new transactions, operate internet banking or make check requests using a dormant account.

If you fail to use the dormant account for three to five years, your bank will transfer the funds in the account to the state government as unclaimed property. If such a case, you can reclaim the funds by contacting your state treasury or unclaimed property office and submitting a claim.

Can You Open an Account Closed Due to Inactivity?

It is possible to open an inactive account. To do this, you’ll have to perform a transaction on the account. However, ensure you take this step quickly, so you don’t lose the account forever.

Close Due To Fraudulent Activity:

If your bank shuts your account due to fraudulent activity, it will go ahead and file a Suspicious Activity Report with the United States Department of Treasury. If your bank takes this step, it would be impossible to reopen the account, and it is unlikely that you would be allowed to open a new account in a different bank.

Since the bank will contact you before shutting the account, it is possible to resolve the issue before your bank account is deactivated. All you have to do is prove to your bank that there was no fraud or show them legal sources for those suspicious deposits. Worthy to note is that a bank can shut your account for any reason, and they may decide to end their relationship with you if they feel that you are a liability.

Can You Reopen an Account Closed Because of Fraudulent Activity?

If you cannot prove to your bank that your account wasn’t used fraudulently, your account would be shut forever. However, if you can, ensure you do so before it is deactivated.

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Is It Bad When a Bank Closes Your Account?

As I mentioned earlier, a bank can close your account for any reason. They aren’t bounded by law to stick with you for eternity. So, in the same way, you can switch banks whenever you like; your bank can decide that it doesn’t want to do business with you and shut your account. In most cases, you may not be able to do anything other than comply, especially if your account was shut due to fraudulent activity. If your account was shut, is it bad?

Having your account closed could be bad for you, especially when it is linked with essential bills. A shut account would make it impossible to pay such bills early. And in some cases, you may be able to open a new account.

One of the major reasons banks shut their customer accounts is due to suspicious or fraudulent activities. So, ensure you steer clear of any fraudulent activity that could make your bank deactivate your account.

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