Closure of a Bank Account

We all know that there are too many banks in every country in this world. At the same time, there are so many people who are opening a new bank account in one or the other bank.

But what do you think? Are there people who are closing the bank account?

Yes, there are nearly the same amount of people who are closing their bank account daily. If we look into the statistics of any bank about the ratio of opening and closing of the accounts. You will find that the ratio is so near. The ratio of new account openings will be high only and only if the bank is the best one in the region.

This happens and nobody can legally stop anyone from closing the bank account. Not even the bank where you hold your account can stop you from closing the account you hold with them.

But you should note one thing and there are a few banks which apply a charge on the people who are closing the account too early.

For example, if you are opening a new bank account with the XYZ Bank operating in your region. And you wish to close the same account the very next month. Then I am very sorry to say. But the XYZ Bank might ask you to pay the charge for this reason.

Now you might be thinking why should I pay to close my own bank account.

That is because there is a cost incurred for everything we do in this world. And when we open a bank account with any bank. There are some costs which the bank pays.

But for what they pay?

The banks pay for the Cheque Book, Bank Passbook, and the Debit Card which the customers receive from the bank. So the bank has to recover this cost right?

Yes, they have to recover the money they have invested to get you these things when you open a new bank account.

The banks will recover this cost only when the customers like you and me maintain a longterm banking relationship with them.

The costs are not only incurred by the bank when they supply you things like the debit card, cheque book, and the bank passbook. There is also manpower involved in this process.

The bank is asking the customer to pay for these things. And the banks only ask when the customer is closing the account just too early after they opened the account.

This is the reason why the banks ask their customer to pay the bank account closing fees.

What are the Requirements to Close the Bank Account?

Now here comes the real thing. What it really takes to close the bank account successfully.

You Should Not Owe Anything to the Bank

The first and very important factor is you should not owe anything to the bank. What this means is there should be no pending payment that you have to make to the bank. It can be a loan if you are planning to close the loan account. If you have a loan account then you have to clear all the outstanding amounts or transfer the same loan to another bank.

If you are not doing these two things then you can not close the loan account in the bank. In the same sense if you have a normal savings bank account. Then you have to make sure that there is no negative balance in your account. If you have any then you will have to pay the negative balance first. And here you should also keep in mind that you are legally bound with the bank to pay the negative balance.

In case you have a current account or checking account. Then same you have to first clear the negative balance if you have any. And then if there are any pending overdrafts then clear those. Once you have cleared these. You have met the first requirement to close your bank account.

Only the Account Holder has Right to Close the Account

If you have opened an account with any bank. Then that bank authorizes only you to use the bank account for the transactions. If the bank account is on your name and someone else is using the bank account. Then it looks strange. Just like that only the account holder of the bank is authorized or has the right to close the bank account. So while closing the bank account you have to make sure that you don’t send anybody else to do it for you.

But what in case of a Joint Account?

In the case of a joint bank account, all the account holders have to sign the bank account closing application form. Only, in that case, the bank will acknowledge the closing request.

And what about a Minor Bank Account?

If you are a parent who is willing to close down the bank account of your child. Which is a minor account then you can do that. This is because you are the legal guardian of the child who has the account. Just go to the branch and you can do it.

Bank Account Closing Form

You have to collect and fill the bank account closing form. This form is available on the website of almost every bank and also at the branch. You can collect the form from either of these two locations and fill it with all the details required. If you fail in collecting this form then you can write an application letter by yourself.

It should be addressing the manager of your bank and the subject should be “Bank Account Closure Request.” Mention your name and your bank account number. The bank will acknowledge your application letter.

Proper Identity Proof Document

After you have collected and filled the application form to close your bank account. You have to visit the branch of the bank to close it. But while going to the branch make sure that you have to carry a proper identity proof document. The bank will surely ask you to display one while you are submitting the form. This is done by the bank to make sure that you are the real owner of the bank account.

Refer to the list of acceptable identity proof documents here.

These are the 3 things that it takes to close a bank account. In short, you should not owe anything; you should be the real owner and proper identity proof with a duly filled account closing form.

And you are all set to close your bank account.

 

By Mayank

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