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- Banks may close an account if it's inactive, has a lot of overdraft fees, or there's identity theft.
- You might be able to file a complaint with the Consumer Protection Bureau if it wasn't your fault.
- You usually can't reopen a closed account, but you'll still be able to open a new one.
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Involuntary bank account closures usually occur when a financial institution detects unusual activity in a bank account.
If a bank account has closed your account, here are a few steps to take so that you'll resolve any potential issues and avoid this situation in the future.
Why a bank might close your bank account
A bank may decide to close your bank account if any of the following circ*mstances take place:
- Your account has been inactive for a long time. According to the Office of the Comptroller, financial institutions might consider a bank account abandoned if it hasn't been used for three to five years. As a result, it will close your bank account and contact you to return any money deposited in your account.
- Significant overdraft fees keep piling up.If you avoid paying overdraft fees, a bank may decide to close your account since it's uncertain whether your account is safe.
- A bank suspects identity theft. A bank may think your bank account has been hacked if it notices you're making big purchases and you haven't responded to bank notifications. To prevent any possible malicious activity, a financial institution will suspend activity.
What to do if it wasn't your fault
Unfortunately, when a bank account is involuntarily closed, it could potentially affect you when you open accounts in the future.
Checking account reporting companies report information about checking accounts. If your account had significant unpaid fees, checking account reporting companies can pass this information onto new financial institutions where you might not be able to open a new account. According to the Consumer Financial Protection Bureau, this may affect you for up to seven years after your bank account is closed.
If your account was closed due to identity theft or for another circ*mstance that wasn't your fault, you'll need to resolve this issue so that it doesn't affect future accounts.
To resolve an involuntary bank account, the Consumer Financial Protection Bureau recommends you first review your checking account history by reaching out to the company on this list.
If you're unable to resolve the issue, the Consumer Financial Protection Bureau also lets you submit a complaint.
Once a complaint is submitted, the Consumer Financial Protection Bureau will reach out to any company that can address your problem, so you get a response back. Any issues reported to the Consumer Financial Protection Bureau are also stored in a database so that the agency can monitor companies better and enforce laws.
Can you reopen a closed bank account?
In most circ*mstances, once a bank account is closed it can't be reopened. You'll have to open a new bank account with your institution or bank somewhere else if you're unable to find an account that interests you. If you'd like help finding the right place for your money, Insider keeps a list of the best best banks, and the best savings accounts.
How to maintain a new bank account
When you open a new bank account, you'll need to monitor it to ensure you don't wind up in the same situation again. Here are a few tips to maintain your new bank account so that it isn't closed by a financial institution.
- Find a new account that you'll qualify for.If your account was closed because you had to pay significant overdraft fees, you still may be able to open a new account. Low-risk bank accounts, prepaid debit cards, and free overdraft protection are worth exploring.
- Add direct deposit to your account.To prevent inactivity in your account, you might want to consider adding direct deposit to your account so that money automatically goes into your account every month.
- Utilize a budget app that will link to your bank account.If you like getting a bigger picture about how you use your money, an app (we've tested and rated the best budgeting apps) might also help with monitoring your account.
Sophia Acevedo, CEPF
Banking Reporter
Sophia Acevedo is a banking reporter at Insider. She covers bank reviews, banking guides, and banking and savings articles for Personal Finance Insider. She is also a Certified Educator in Personal Finance (CEPF). Sophia joined Insider in July 2021 and is an alumna of California State University Fullerton where she studied journalism and minored in political science. She is based in Los Angeles. You can reach out to her on Twitter at @sophieacvdo or email sacevedo@insider.com. Read more about how Personal Finance Insider chooses, rates, and covers financial products and services >> Below are links to some of her most popular stories:
