Closing a bank account? Read this before you pay avoidable fees

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Closing a bank account seems simple—you walk in, fill a form and transfer the remaining balance. But many customers discover unexpected charges after the closure request, especially if the account has been inactive or under-funded. Banks are allowed to levy certain fees under RBI rules, and these can quietly add up. Before you initiate closure, it helps to run through a short checklist so you don’t end up paying for something you didn’t anticipate.

If your account hasn’t maintained the required average monthly balance—Rs 5,000, Rs 10,000 or more depending on the bank—you might find pending non-maintenance charges. These are usually deducted before the account is finally closed. Even if you plan to shut the account, the bank will still calculate dues for the previous cycle, so check your last two statements.

Sometimes charges accumulate silently, especially on accounts you don’t use. If your balance has gone negative due to penalties or service fees, the bank will ask you to clear the deficit before approving closure. Many customers are surprised to find an account they thought had “zero balance” showing a negative amount.

Even if you haven’t used your debit card in months, the annual fee may still apply. Some banks also charge for SMS alerts, old cheque-book requests or add-on services. When you initiate closure, the bank will deduct any pending fees from the remaining balance, so it’s best to settle these beforehand.

Loan EMIs, SIPs, insurance premiums and utility auto-payments may have been authorised through that account. If you close it without cancelling these mandates, the next debit request will fail. This could lead to penalties from lenders, missed SIPs or even lapses in insurance. Make sure you update your payment instructions with the replacement account first.

Most savings accounts don’t levy a closure fee after one year, but some banks charge a small amount if the account is closed within the first 6–12 months. Salary accounts usually don’t carry closure fees at all. Current accounts, however, often do. The amount varies—some banks charge ₹100, others a percentage—so it’s worth confirming in advance.

Before closing an account, download your last three statements, clear negative balances, move your auto-debits elsewhere and ask the bank to list any pending charges. The process takes ten minutes but saves you from unnecessary deductions later. Once everything is settled, closure is usually smooth and final—with no unexplained fees appearing after the fact.