Many salaried people hold multiple bank accounts as they change jobs or shift to new cities. In such cases, some banks convert their zero balance salary accounts into regular savings accounts after a couple of months, as they notice no salary credits in this period. So, you are expected to maintain a minimum average balance in those non-salary savings accounts. It is better to close any dormant account to save on charges that would be levied for not maintaining a minimum average balance as specified by the respective bank. Here are the steps you need to follow to fully close your bank account.
Stop all automatic debits first
Before you proceed to close your bank account, you need to de-link other debits or relationships. This includes closing any securities trading account linked with it, and primary and secondary credit cards issued by the bank linked with this savings bank account. In case your old bank account is linked to repay monthly loan instalments or invest in recurring deposits, you need to provide a new alternative bank account number for your lender or recurring deposit providing institution to debit. You can provide these details while filling a de-linking account form issued by the bank at the time of account closure. It will take you approximately a week to 10 days to close your other relationships connected with the bank account you wish to close. Only after all those are done can you proceed with closing your bank account.
Submit account closure form
To carry out the account closure process, an account holder needs to visit the branch personally. At the branch, you need to submit an account closure form along with the de-linking form, unused cheque book and debit card. In the form, you need to mention the reason for the closure of the bank account. You can also submit a letter to the branch manager with your account details, stating the reason for the closure of account. In the case of a joint account, the form or letter should be signed by all account holders. Also, provide details of an alternative account to transfer the funds in the bank account. You can also choose to take a demand draft or opt for national electronic fund transfer (NEFT), etc. as mode of payment while closing an account. In case the balance in the account is less than Rs 20,000 it can be paid in cash during the closure process. After successfully closing an account, maintain the last bank account statement that states the date of closure, for future reference.
Update your new account details
In case you close your old salary account, then update the employer with the new account details for future credit. Similarly, if you were earning pension income from government service after retirement in the account just closed, you need to inform and update your government employer of the change in account details.
If you had linked your utility bill payments with the bank account just closed, you need to provide the new bank account’s details for pre-authorised debit to continue.
Be aware of closure charges
Banks don’t charge customers in case savings accounts are closed within 14 days of opening. But, account closure after 14 days, but before one year is charged by most banks. So it is important to choose your bank wisely. For instance, SBI charges Rs 500 from customers who close accounts after 14 days of opening, but close it before one year. After, completion of one year, there are no charges for account closure levied by SBI. Banks levy these account closure charges from customers to recover the costs incurred in opening accounts and issuing cheque books and debit cards.
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