If you suddenly cannot access your bank account or if your debit card is declined, your account may have been closed. Having a closed bank account means your account no longer exists. A frozen bank account can have similar short-term consequences – it’s still open, but you can’t access the funds.
Your bank or credit union can freeze or close your account for any reason – and without notice – but some reasons are much more common than others, and you can take steps to prevent or reverse the process.
Here’s everything you need to know about a frozen or closed bank account.
What happens when your bank account is closed or frozen
Your bank can notify you if your account is closed or frozen, but it is not required.
When your bank account is frozen, you will no longer be able to make transfers or withdrawals. Direct deposits will continue to be made, as will manual deposits, but you will not have access to these funds.
When your account is closed, the bank may change your closed account to another type of account, send you a check for your closed account balance, withhold funds so you can recover, or use the funds to pay outstanding amounts.
If your account is overdrawn when it is closed, you may be required to immediately pay the amount you owe the bank.
Why your bank account could be frozen or closed
Your bank can freeze or close your account for several reasons. The first is whether there is little or no activity. Suspicious activity, such as a debit card purchase at a gas station in a distant state, could also trigger an account freeze. Much like a purchase from a retailer that reported fraudulent activity. If there is suspicious activity on your account and your bank is unable to reach you to verify your purchases, it may suspend your account.
If your bank receives a court order to freeze your account because of a lien on your account or a garnishment of wages to a creditor, for example, it will need to do so immediately and without notifying you first.
Your financial institution could close your account if you have excessive overdraft charges or if you have an ongoing negative balance; if you frequently make more transactions in your savings account than allowed per statement cycle; or if your paper checks are lost or stolen, for example.
The rules and requirements for bank account closings and freezes vary by institution, so be sure to read your deposit agreement carefully.
What to do when your bank account is frozen or closed
If your account has been frozen due to suspicious activity, contact your bank to verify your purchases. You may need to verify your identity with documentation before regaining access to your account. You should also check your account statements and, within 60 business days of sending your statement, notify your bank or credit union of any unauthorized transactions.
If your account is frozen due to a court order, you can try to have the judgment voided against you. This could involve working with a lawyer to file a petition and communicate with a judge. If that doesn’t work, you can pay the judgment to regain access to your account.
You can file a written complaint with the Office of the Controller of the Currency’s Customer Support Group if you believe your account has been wrongly closed, but it may take up to two months before you are contacted about the matter. the results of your complaint.
If you haven’t received a check for a closed bank account balance, first try contacting the bank’s customer service for assistance. If that doesn’t work, contact the OCC for help getting your funds by completing the online customer complaint form.
How to prevent your bank account from being closed or frozen
There are several things you can do to prevent your account from being closed or frozen. If you plan to travel or make a large purchase with your account, be sure to let your bank know.
Pay attention to the number of savings withdrawals you make each month to make sure you don’t go over the limit. If you tend to charge your account, go for overdraft protection so your transactions can be covered.
Also be aware that sometimes a bank account can be closed or frozen without your fault. Banks need to protect their assets and yours, so any activity that could be interpreted as suspicious or illegal could trigger a freeze or shutdown. If something happens with your bank account that you don’t understand, contact customer service for more information. If your account is frozen due to fraudulent charges or if your account is closed with a balance, there are ways for you to get your money back, although it can take time and effort.