Having your bank account has its benefits. You get to save your money in one place while earning extra income in the form of savings interest. Other benefits of having a bank account are that people also invest in fixed deposits, open current accounts for businesses, etc. People even go to the extent to open multiple bank accounts to avail of different benefits from different accounts.
But what if your account were to get frozen or get shut because of bankruptcy? What happens if you send money to your closed bank account? Would it be possible to recover money in such situations? All of these situations are very uncertain and people should be aware of the above. Let us now understand how we can tackle these situations and recover our money.
Reasons Why Your Money Gets Stuck
There are numerous reasons why your money gets stuck in the bank. Following is the reasons:
1. Frozen Bank Account
The biggest reason why your money may get stuck is since the bank has frozen your account. Usually, the bank blocks your account when they discover that there are some problems with your account. By freezing your account, the bank forbids you from carrying out certain activities. Although you are allowed to deposit your money into your account, you cannot withdraw your money. In short, your money is stuck with the bank until your account starts functioning back to normal.
2. Account is Closed
Your money will get stuck in your bank account if it shuts down due to bankruptcy or if you have shut your bank account and forgotten to withdraw money. If you shut down your account there are chances that you can still withdraw your money up to the permissible limit.
3. Dormant Account
In any case, if your account remains inactive or dormant for a longer duration, the banks will transfer your money to any fund that it may have. The process varies with every bank, about handling inactive accounts. Check with your bank if you are unaware of it, or it is better to clarify with the bank before opening an account there.
Step By Step Process to Get Your Money From closed Bank Account
We have already addressed various reasons why your money may be stuck in the bank account. But in case a customer wants to withdraw or claim his deposits, what should they do? The following are the ways you can get your money back:
1. Unfreeze the Bank Account
As discussed earlier, if your account is frozen by the bank on several grounds like the bank suspects fraudulent activity, court’s orders, outstanding debt, or using funds for illegal work. If your account is frozen due to legal problems then it will take a while to unfreeze it. But if in any case your account gets frozen for unknown reasons or suspected fraud, you have to contact your bank and provide clear identity proof. Once you are cleared of not having any connections in fraudulent activities your account will unfreeze and you will be able to withdraw your money.
2. Withdrawing Money from a Closed Account
Many people make the mistake of not withdrawing their money from a closed bank account. Before closing the bank account, you must ensure that you transfer your funds to your latest account. But make sure you have a minimum balance required by the bank otherwise they will slap you with bank charges. Sometimes you may end up transferring your money to a closed bank account. In this case, the transaction will not be accepted and hence you should get your money back. If the bank goes bankrupt then the depositors may be insured in some cases.
3. Claiming the Unclaimed Deposits
If your account has been dormant for a longer-term, the bank will transfer your unclaimed deposits. However, that does not mean that you cannot get your money back. You will have to fill a claim form, know your customer (KYC) form and show the receipts of your deposits or simply your passbook. Once the bank gets all of your identity proof and account proof, they will get the unclaimed deposit credited to your account which can be withdrawn. However, check with your bank for their specific process in handling dormant accounts.
Also Check: How to Use An ATM Machine
In short, you must ensure that you maintain an active bank balance, fill all the required KYC documents, keep a track of your transactions and use your money as and when it is required. Please ensure that you repay all your loans or report any suspicious transactions to your bank. By following all the rules, you can easily avail all the banking facilities that make your life easy.
Frequently Asked Questions
My employer sent my salary to the closed bank account. Will I lose my money?
The transaction made by your employer will not be cleared in the first place and the amount will be credited back to their account. However, the chances of losing your money are slim.
A fishy transaction took place in my account. Should I report it?
You must report it immediately as the bank can freeze your account for suspicious activity.
How do I close my bank account?
You must approach the bank who will make you fill an account closure form and submit some documents. Lastly, the bank will also levy some charges and require you to maintain a minimum balance in your account.
My bank shut down suddenly without any notice. I have some money in my account. Will I get my entire money back?
You may get your money back depending on your local banking regulations.
Is it possible to withdraw the money if the account has not closed yet?
You are allowed to withdraw your money while maintaining a minimum balance before closing your account.