How to Close Bank Account in India?
There are so many banks that are running their operations in India. If you are an Indian then you have tons of choice about in which bank you should have your bank account.
Want a bank owned by the Government? Indian Banking system has got you covered.
And if you want to have your bank account in a private organization owned bank then you have those too. In other words I would say you have too many banks to have banking relations with.
So if you are not happy with your current bank then all you can do is close that bank account and get a new one. There are so many options to choose from.
When there is competition in the market the ultimate winner will be the consumer. The competition may not be good for the organization it makes them put more effort into running the operations.
But competition is always good for consumers. That is because we will get the bargain powers with the banks. We can an opportunity to get better and better banking services.
And that is the reason why I mentioned that you can just close down your bank account and open a new one. In this guide I will let you know about the things you should take care of when you are planning to close down your account.
It is not like you just make your mind and your account will be closed. There are certain procedures for that in India. If you have got some debts to clear then you will have to do that first.
I will explain everything and also uncover the things you should take care of. You just have to read this article till the end and I am sure you will effortlessly close your account.
What Does Closing the Bank Account Mean?
The meaning of closing down a bank account is you are ending all your banking relations with the bank. All your access to the bank account will be taken off from you. That is because when your bank account will not exist what will you have access to?
You have to return the things you received from the bank like your cheque book and the ATM Card(s). Not all the banks will ask to return your ATM Card(s) but there are few banks which demand this.
What Happens When You Close Your Account?
There are quite many things that will happen when you close your account. Let me list them down for you.
• ATM Cards will stop working.
• You can not issue cheques from your account.
• Internet Banking will not work.
• The mobile banking application will also stop working.
• No funds transfers can be made from your account
• You can not receive your salary or any kind of deposits in your account.
Things to Care of Before You Close Your Account
We have discussed the actual meaning of closing down a bank account and what will happen once you do it. But there are some important things which you should focus on when you are planning to close the account.
Let me explain it to you one by one.
Open a New Bank Account First
The bank account is a very essential thing and we just can not survive in this modern world without the bank account. So I recommend you to open a bank account before you close your present account.
And this time choose the right bank for you. This is because there should no circumstance in the future which will make you close your new account. After all it is not a good thing to close and open the bank accounts multiple times.
Transfer your Account Balance
Once you have opened your bank account in a new bank. You have to transfer your remaining bank balance to your new bank account.
For this first, you have to check your remaining account balance. There are many ways using which you can check your account balance. You can use missed call numbers, SMS Banking, Internet Banking, Mobile Banking, and more.
Clear the Negative Balance (if any)
If you have a negative balance in your bank account then the bank will not allow you to close your bank account. They will not let you until you clear the bank account balance and this is a legal matter.
So if you have any kind of negative bank balance in your bank account then clear that and then you can proceed to close your bank account.
Update Your Salary Account
Notify your employer or your organization where you work about your new bank account. Tell them to send your salary to your new bank account.
Because, if you don’t update it your organization will send your salary to your old account then you will be in trouble. That is because your old account is not active.
It is not like you will lose your salary, you can get it back but again there are some procedures to follow. So it is better to take precautions than taking action to solve the problem.
Update Your Billers
If you have set up auto-debit for your billers like telecom operators, credit card, etc. then you have to update them. Remove those billers to get paid from your new bank account.
If you don’t do that then your payments will keep bouncing which is not a good thing for you.
Steps to Close Your Bank Account in India
That was a lot of information about closing down your bank account in India. I highly recommend you to take care of the things mentioned above before you close your account.
Now let me tell you the steps which you need to follow to close your account.
Step 1: Collect the Account Closure Form
The first thing which you have to do is get the account closure form. This form will be available on the official website of your bank.
All you have to do is just search for the account closure form of your bank on Google and you will get it.
Step 2: Fill the Account Closure Form
The next thing which you have to do is fill the account closure form with all the required details. you will be asked to enter your account number, your name, your registered mobile number, etc.
Step 3: Check the Details and Sign the Form
Check all the entered details for mistakes. If you have done any then take steps to correct them. Once you make sure that all the entered details are correct make your signature on it. Please note that only the bank account holder can sign the form and not his representatives.
Step 4: Visit Your Home Branch
When you want to close your bank account it is mandatory in almost all the banks in India to visit your home branch. So take your duly filled and signed account closure form, your bank passbook, cheque book, and ATM Card and visit your home branch.
Step 5: Look for the Charges and Submit the Form
In some banks you will have to pay the account closing charges when you are closing the account too early. So for the exact amount of account closing charges you need to contact the home branch of your bank. And finally the last step to close your bank account is to submit the account closure form at your home branch.