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When a bank closes your account for no reason, it's quite upsetting. The best way to prevent this from happening is to be aware of the situations that may lead to a bank closing your account. If you do not understand why a bank has closed your account, you may be tempted to blame yourself. But is the reason always viable?
The truth is that banks are allowed to suddenly close your account, even if they're doing so without giving you any prior notices. This can be very disadvantageous. Thus, this article will try to explain why banks close your account without any prior notice.
What Does Getting Your Account Closed Mean?
When a bank closes your account, it means that you will not be able to use the services offered by the bank anymore. It is also likely that you will not be able to transfer money to other banks, unless you do so in another country. However, there are some cases where you may still be able to use the services of your bank.
Common Reasons a Bank Can Close an Account
There are many reasons why a bank can close your account. Some of these reasons include:
Long period of inactivity
A bank can close your account if you have not used the services offered by the bank for a long period of time. In most cases, this period can vary wildly, ranging from four to twenty four months. It all depends on the bank you're using and possibly where you live. If you do not use the services offered by the bank for a long period of time, then the bank may close your account. However, banks will usually give you a prior notice for this.
Suspected fraud or illegal activities
A bank can close your account if they suspect that you have been involved in fraud or illegal activities. This can happen whether or not their suspicions have yet to be confirmed.
Generally, the bank may note that suspicious activity is happening in your account if you've been moving a large amount of money in a short period of time. They may also note that you have been receiving large amounts of money from the same account out of the blue.
Failure to pay bills on time
A bank can close your account if they feel that you do not have enough funds to cover your debts. This is often because you have been making a large number of payments in the same day or at the same time. However, it can also happen if you have failed to make payments for several months without any prior notice from the bank.
How to Avoid Getting Your Bank Account Closed
You can avoid getting your bank account closed by making sure that you are making payments on time. You should also be aware of the situations that may lead to a bank closing your account. For example, you should be careful if you have been receiving large amounts of money from the same account, and if there is a high amount of money being transferred to another account.