Planning to close your bank account? Here is how to avoid charges

Depending on the tenure with your bank, you can be charged differently for closing a bank account. For instance, within a year of opening, if you close your account, the bank will levy additional account closure charges. For the closure of a bank account between 14 days of opening to a year after opening the account, banks charge account closure charges.

If an individual closes his account within 14 days of opening it, banks generally do not charge any additional charges. Also, one can avoid being charged for closure by the bank if one closes one’s account after 1 year of opening it.

Most people have to open new bank accounts on various occasions such as after starting a job or joining a new company. However, after leaving each organization, one is usually required to open a new bank account. All banks have their own monthly average balance that needs to be maintained in every account and banks are quite strict about it. As a result, to avoid having so many bank accounts and attracting non-maintenance charges, most people opt to close them, but they also face additional closure charges.

SBI (State Bank of India) does not charge their account holders any account closure charges, in case he/she closes their bank account after 1 year. Earlier, SBI used to levy a charge of Rs 500 if an account holder closed his/her bank account even after 1 year of opening a bank account. However, if the account is closed within 1 year of the opening date, the account holder will still have to pay charges. There is no change made for account closure within a year of opening an account.

Experts say these account closing charges are levied by banks to recover the cost incurred by them while opening an account and offering an opening kit such as a debit card and checkbook. Earlier, banks also used to charge around Rs 500 along with GST if a deceased person’s account was closed, which is mostly not levied by banks anymore.

Experts say, if one is unhappy with their banking services, he/she can close the bank account within 14 days of opening it and also avoid closure bank charges. Note that banks usually levy account closure charges ranging between Rs 500 to Rs 1,000 in case a current account is closed after 14 days.

Keep in mind, the Reserve Bank of India (RBI) does not have any specific guidelines on closure charges. Hence, levying service charges depends totally on the bank’s discretion.

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