Overdrafts occur when debit transactions exceed your available balance, leaving you with a negative balance.

Banks may close your account if you have a negative balance and show no signs of making a deposit to rectify it.Įxcess overdrafts. You’d need to make a deposit to bring your account balance positive again.

When a bank account has a negative balance, it means you don’t have any funds available to spend. If you fail to make your initial deposit by a certain date or there’s no activity on the account within a specific window of time the bank could close your account. Or maybe you just opened a new checking or savings account to take advantage of an introductory bonus. You might open a new bank account intending to switch funds over from your current bank. Here are six common situations when a bank might close your account: Understanding why a bank account could be shut down can help you avoid an unpleasant financial situation.Ī financial advisor can walk you through different banking options for you financial plan.īanks can choose to close accounts for different reasons, though some might be more common than others. But why would a bank close your account? The short answer is that banks and credit unions can close accounts for a number of reasons.

Having a bank account closed can be inconvenient, especially if you didn’t see it coming. SmartAsset: Why Your Bank Closed Your Account and What to Do

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