I currently have a couple checking/savings accounts that are sitting at $0 because I found better accounts and switched banks for some reason or another, is it worth the time to try to close these accounts? Are there any drawbacks to keeping them open?
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1If these are at credit unions, you may lose your membership if they close your accounts due to inactivity.– MichaelJul 25, 2017 at 19:00
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8It entirely depends on your bank.– user428517Jul 25, 2017 at 19:53
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2Yes - you're probably being charged an "inactivity fee" - meaning that the bank says, "Oh, you've got an account, but it's got no money in it? Well, then, we'll charge you money to not have money". If you go in to close the account they will demand that YOU pay THEM money to close the account - and if you don't they'll leave the account open, continue to debit it, and your debt to the bank will continue to increase. VEGAS, BABY!!!!! :-)– Bob Jarvis - Слава УкраїніJul 25, 2017 at 21:47
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1@BobJarvis: Got there once when an attempt to close my account resulted in it containing zero but remaining open. I told them I wasn't going to pay it and that was that. I got a letter about a week later indicating the account was closed. They even bothered to credit back the fee first.– JoshuaJul 25, 2017 at 22:21
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1It's absolutely bank dependent. When my dad died, I was the executor of estate. I closed all of his bank accounts, and one was at something like -$550. It was all inactivity, underbalance, and overdraft fees. It was like, Less than $100 in account fee, inactivity, overdraft, <$100, overdraft, inactivity, overdraft, <$100, overdraft, inactivity, overdraft, and so on. I told them I was closing a deceased person's account and they credited back the $550 and closed the account. I still moved my own accounts away from them.– Kevin FeeJul 26, 2017 at 15:35
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4 Answers
The main concern I'd have is that something will happen to the account while it's unattended. While you may not have any money in it to risk, you could have a fraudulent check written against it that causes you to incur NSF fees.
Your bank also might change its no-fee policy (I assume these are no-fee accounts, or there's an obvious drawback). If it does, it's possible you might not notice, and again then the fee might be assessed, overdrawing you and causing additional NSF fees.
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4My bank, in accordance with federal guidelines, does charge fees on inactive accounts. On each anniversary of inactivity from the second year to the eighth, an inactivity fee is collected. These can generate a nsf charge and/or accompanying overdraft fees. (Unrelated, on the ninth anniversary of inactivity, a final fee is levied and the bank account is transfer to the Bank of Canada.)– LanJul 26, 2017 at 0:50
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I can't speak for other banks, but when I was in this situation (at a moderate-sized regional bank) they wouldn't charge an account at $0 (and this incur a flurry of other charges). I closed the account anyway, but the tellerlooked very surprised when I told her that I was worried they would charge me when I was already at $0. Jul 26, 2017 at 12:56
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@WannabeCoder sounds like you had a good bank. I had a savings account @ $0 that was charged a $15 "minimum balance" fee, followed by a $34 NSF fee, and then a $15 fee for each day the account was under. Thankfully a couple hours working up the chain through their phone support got everything -but- the initial $15 fee waived, but the principle still stands that some policies really can screw someone over if they aren't paying attention.– user17781Jul 26, 2017 at 15:31
If your accounts have an overdraft facility, then every open account is classed as available credit which has a negative effect on your credit score. It's not normally a major concern but it is a factor. (nb. this definitely applies to the UK, maybe not where you are)
No Drawbacks.
One day, the bank might decide to kick you out. Typically, they send you a letter and warn that they will close it if it stays unused, and then you have to decide if you move some money into it or have it cancelled.
The security concept of minimising attack surface could be stretched to apply here, especially if closing the account would mean the end of your relationship with that bank. Essentially more routes into your finances or personal information means more opportunities for fraud, more accounts to keep an eye on, more logins to remember/store, and even more paperwork/idle cards to check (for unexpected activity and T&C changes), store and eventually shred.
However I had a couple of online-only savings accounts with zero balance for a few years, at a bank where I have other accounts, and I didn;t worry in the slightest. (You can open the accounts online but have to phone to close them and sitting on hold is too much of a chore for me. Eventually they realised their mistake, brought in a minimum balance requirement, and after giving notice closed accounts with less that that in them)
