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Can a Bank Account Be Reopened

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Updated on August 1, 2022 by
Can a Bank Account Be Reopened

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Can a bank account be reopened? Well, that depends on the reason for which you are asking. If you want to reopen your bank account due to a mistake that was made during the process of opening the account or any other issues, then there is nothing to worry about. However, there are cases where reopening a once dormant bank account may be particularly hard to do.

In this article, we will help you understand what can happen when a bank account is closed and what steps you need to take in order to open it again.

Reasons Why a Bank Account May Be Closed

As mentioned above, a bank account may be closed for many reasons. The following are some of the most common reasons for which a bank account may be closed:

Suspected fraudulent activity

The first reason why a bank account may be closed is due to suspected fraudulent activity. In this case, the bank will take all necessary steps to investigate the matter and clear it up. This can happen if there's proof that you've made deposits of cash of a suspiciously large value to someone else. Banks may be notified to report such findings to the IRS, which can lead to your bank account getting closed.

Can a Bank Account Be Reopened

Long-term inactivity

Another reason why a bank account may be closed is due to long-term inactivity. In this case, the bank will stop processing your transactions and cut off all of your services, including withdrawals and deposits. This period of inactivity can be anywhere between four months to twelve months. Some banks will also need to start an escheatment process after this period.

Negative balance

The third reason why a bank account may be closed is due to a negative balance. If you have a tendency to overdraw your account, then you may be denied from making any further transactions. They’ll usually give you a warning if this is the case. If your balance is negative for more than a certain period of time, then your bank account will be closed. However, simply paying off any of these negative balances will usually restore your account.

How to Reopen a Bank Account

It may be possible to get a bank account reopened, but all that relies on the specific reason that your account was closed in the first place. You may find it more difficult to reopen an account that was closed because of a negative balance or because of fraudulent activity. If the account is dormant or if there is no money in it, it won't be as difficult to reopen it.

Sometimes you can reopen a bank account after a certain amount of time by making a direct deposit to the bank. If that happens, a new account will be opened automatically. Request to reopen your account must be accompanied by a request to have funds deposited in it. Other banks will reopen an account simply if you make a withdrawal, without requiring a deposit.

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