To maintain a bank account, one has to comply with the average quarterly balance requirements. To ensure good housekeeping of one’s finances, it is advisable to close bank accounts that are not used actively.
De-linking of account
Before opting for closure, delink the account if it is being used as a registered bank account for any investments, loans, trading, credit card payments, deposits, NACH mandates or standing instructions. An alternate bank account number can be provided in place of the account being closed. A de-linking account form may have to be filled at the time of closure.
Form
The account closure form will be available at the bank, which can seek a reason for closure of account. The form should be signed by all account holders. Another form giving details of the account into which the balance funds can be transferred has to be filled. The account holders should personally visit the branch to carry out the closure.
Documents
The bank may ask for unused cheque books and cards to be deposited along with the form. These documents and cards will be destroyed by the bank.
Charges for closure
Banks don’t charge for closure within 14 days of opening of an account. Any closure of the account after 14 days but before 1 year may be subject to account closure charges. Normally, closure of an account after 1 year are not subject to closure charges.
Funds in account
Balance in the bank account can be paid in cash (up to Rs 20,000 only). Alternatively, the account holder can choose the mode of payment.
Point to note
Transfer sizeable balance from the account to be closed to another bank account before carrying out closure procedure. Maintain the last account statement showing closure of account.
(The content is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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