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How to close a Bank Account?

IamCheated.com Research Team | January 22, 2019  6:45:pm

How to close a bank account? 

You must be thinking that closing a bank account is really simple and can be done in 10 minutes. The fact is there are certain steps which must be followed when closing a bank account, to ensure that the account has been closed in a proper way.

Following the proper steps while closing bank account, helps avoid unnecessary charges and complications. In this blog, we will discuss why it’s important to close unused bank accounts and how to close a bank account.

Why it is important to close old bank accounts?

A lot of people have multiple bank accounts because of various reasons. If all the bank accounts are used, then there’s no issue. If bank accounts are kept inactive for a long time, it is good to close inactive bank accounts. These are the reasons why you need to close inactive bank accounts.

1. Your old salary account can attract charges

When you change a job and a new salary account is opened, your old salary account is automatically converted into a savings bank account within a few months. In such a case, you must maintain a minimum balance in that account. If you don't maintain minimum balance, your bank deducts charges for non-maintenance of minimum balance. This eats up your money and the balance can even turn negative.

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2. Excessive Fee

You will be provided a debit card for all your bank accounts and bank charges annual fees on these cards. Your bank deducts money for sending SMS alerts. Instead of paying money for the service which you no longer use, it’s better to close the account.

3. Fraudsters might misuse

Usually, dormant account gain attention of fraudsters and they might misuse it for their benefit.

4. Confusion at the time of filing ITR

You must provide information and statements on all the accounts while filing ITR. So, having multiple accounts creates unnecessary confusion at the time of filing ITR.

How to close a bank account?

1. De-linking of the bank account

Before closing your bank account you must delink the account if you have provided this account number for loans, investments, trading, credit card payments and NACH mandates. You must provide an alternate bank account number in the place of the bank account which you are closing. A de-linking account form must be filled when closing the account.

2. Fill the account closure form

To close the bank account, you must fill the account closure form provided at the bank. In this form, you must provide the reasons for closing your bank account. You must also fill another form providing the details of the account to which balance has to be transferred.

3. Handing over the documents

While closing the bank account, the bank might ask you to provide unused checkbooks and credit/debit cards along with the account closure form. The bank will destroy these documents and cards.

See Also: How Payment bank accounts help in reducing frauds and excess charges?

4. Charges for closing the bank account

Banks will not charge for closing the bank account within 14 days of its opening. If you want to close your bank account after 14 days and before one year, you will be charged closure fees. Usually, you will not be charged for closing bank account after a year. Before closing your bank account make sure to transfer entire balance to another account.

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