Reasons for Closing the Account and Ways to reopen it


Can you reopen a closed bank account? Based on the reason why your bank account has been frozen, you could reopen your account by initiating the latest transactions after the duration of inactivity. It could be done by contacting your bank to clear any confusion or pay the negative balance.

However, for account holders having displayed a pattern of suspicious transactions or overdrafts, they might not be able to reopen the account. If you were wondering to gather information about reopening your closed bank account, rest assured you have come to the right place.

Why would your banks close your account?

Usually, when it comes to closing your personal and savings accounts, rest assured to come across three major reasons.

  1. Inactivity
  2. Fraudulent or suspicious activity
  3. Excessive overdrafts or keeping a negative balance for a long duration

Moreover, your account closure could be a result of a few laws and regulations. It would be worth mentioning here that banks would be legally permitted to close accounts regardless of the reason and without giving any notice. However, banks would often send written notice for closing your account.

Let us delve into the given reasons for closing your bank account along with options for reopening your account in every case.

  1. Closing of account due to inactivity

For inactivity in your account for a significant length of time, rest assured it would be marked by the bank. A dormant account would be closed by the bank due to its expensive maintenance. A dormant account would be different from a closed account, as the dormant account would still be functional. However, it would not be available for usage.

You could reopen an inactive account through a transaction within a specific duration. However, you would be required to ensure your transaction would be adequate. No fee would be incurred for account reactivation.

  1. Closing of account due to fraudulent or suspicious activity

Banks would close your account automatically to show proven or apparent fraudulent activity. The bank would close your account for suspicious activity incurred in your account or suspicion of fraud undertaken in your account.

When your account has been closed for suspicion or fraudulent activity, you would not be able to reopen your account. It would be worth mentioning here that no other bank would enable you to open an account in their bank as well.

  1. Closing account due to excessive overdrafts

A transaction or payment made from your account amounting to more than the funds available in your account would enable the bank to close your account. It would imply your account having a negative balance in your account. The duration of your account has a negative balance before the bank closes your account would differ from one bank to another.

Reopening your account would be based on the specific policies of the bank. It would also be dependent on the frequency and amount of the overdrafts. Usually, a closed account due to a negative balance for a significant length of time could be reopened by paying the negative balance. It would be inclusive of the overdraft and transaction fees.