How to Close Bank Account Savings or Current: The process of opening a new bank account is not complicated. Today with the help of advanced technologies, one can open an account through an online platform also. In most cases, the salary account of an individual is opened by the company he/she got hired in, or the parents might open it for them. But when a person decides to close a bank account savings or current, that is when the actual confusion and difficulties come. Closing a bank account is an important process and is essential if one is not using a particular bank account for quite a long time. In this article, we will have a detailed overview of topics related to closing a bank account and the steps that are involved in it. So that one can get a clear idea of how to close a bank account without facing any confusion.
Steps Involved in Closing a Bank Account Savings or Current
Different banks follow different procedures for closing a bank account. Still, broadly every bank needs to follow the following steps in order to move with the process of closing a bank account savings or current:
Before Closing the Account
- First of all, a person cannot close a bank account through the online platform; he/she has to visit the main branch or at least to the nearby branch to start the procedure for closing a bank account. This is not as easy as opening a bank account which can be done online.
- Suppose the bank has made a person’s account dormant because the account was inactive and there were no operations seen in the account for almost 2 years. In that case, he/she has to first reactivate the account to start the procedure of closing the particular bank account; thereby, he/she have to submit the account closure form.
- If a person has a credit card, Demat or trading account, fixed deposit, loan, and locker linked with the savings bank account, then he/she has to decide immediately what he/she wants to do with the credit card, fixed deposit, etc. once the account is closed.
- Most importantly, when one is going to close a bank account, he/she must always carry document proofs such as an Adhar card or pan card or driving license. A hard copy of these documents is submitted to the branch where one is closing his/her savings account.
- In the case of a joint savings account, both the account holders are required to be present in the branch during the closure of the bank account. In some banks, a No Objection Certificate (NOC) from the account holder who is not present also works.
Steps to Close Bank Account
- Before closing the savings account, withdraw the balance amount in the account or transfer it to some other account. One can get the balance amount in cash or through a demand draft from the bank.
- Fill the account closure form properly and submit it to the bank employee who is in charge of closing accounts. One can get the account closure form on the online website or in the branch.
- One has to specify the reasons why he/she prefers to close the account. He/she needs to specify these reasons on the closure form.
- If the savings account is linked to a credit card, trading or Demat account, fixed deposit, etc., one needs to first delink the account.
- The bank officer might demand a self-attested signed letter or an application for starting the procedure of closing the savings or current account.
- One has to surrender the cheque and the debit card to the bank after the account is closed. Some bank employees ask to destroy the debit card after the closure of the bank account.
- The bank officer will check for any dues that are linked with this account and are still pending before confirming the closure of the bank account. Any fines, dues, etc., must be cleared immediately to continue the procedure.
- The bank might charge the person closing the account some charges. For example, SBI charges 500 + GST for closing a savings or current account.
- The bank officer will then hand over a copy of the acknowledgment, and the account will get closed within 10 working days.
- Once the account gets closed, the account holder will receive an SMS and mail in the registered mobile number and email id.
Why Should One Close a Bank Account?
Many individuals have multiple bank accounts which they don’t operate because when one changes a job, he/she might have to create a new salary account with the bank his/her company has a tie-up, but after he/she leaves the company, the account becomes a saving account thus keeping this much account is never advisable. One should close a bank account for the following reasons:
Life Becomes Simple: One who is handling less number of bank accounts does not have too much of a headache as he/she doesn’t have to keep track of different transactions of different banks.
Charges: Savings accounts have some paid services such as debit card usage fees, SMS fees, atm charges, etc. By closing an account that is not in use, one is saving all these unnecessary expenses.
Minimum Account Balance: People also have to maintain a minimum balance in the bank account to avoid penalties from the bank. This money is kind of blocked and can’t be used for other investments, so it’s better to close the account and get the money.
Less Interest Rate: Saving accounts offer interests at a very minimal rate which ranges between 3.5% to 6%. If a person puts the same money in a fixed deposit, mutual fund, or a Demat account, then he/she can earn a better return as compared to saving accounts.
Income Tax Returns: One has to show his/her non-dormant account in the income tax return. So it’s better to close accounts that are not in use because showing it on the income tax return doesn’t make any sense.