The Dangers Of Leaving A Bank Account Open

Posted by pfadvice
March 20, 2007

One would assume if you had a positive amount of money in a bank account, then you your be safe leaving it there. That is not the case these days as one member explained in the forums:

I had a saving account that I had a car payment automatically withdrawn from a few years ago. The last time I used the account was a deposit in January of 2005 when the car loan was paid off. There was a residual balance of $19 left in the account at the time. In the meantime I moved, got married, bought a house, had a baby, and completely forgot about the account. I never changed my address with the bank so I never received any statements as well.

Just yesterday I remembered I had the account so I looked into and it was an odd coincidence that it was only closed last Friday with a -$154 balance. That’s right, I left an account open with a positive balance for 2 years and through service fees the account reached a negative one-hundred-fifty-four dollar balance.

I talked to them on the phone and here’s what happened. The account only went negative from their service fees just recently, but once it reaches a -$10 balance they charged me $5 a day for almost 30 days before closing the account. I could possible understand this if I overdrew the account, but their own service fees forced the account negative. I’ve talked to the bank manager about this and she did not offer any help and just stated that this is their policy.

I had a very similar incident happen to me while living in Japan. I have an account with no fees that I left open with information going to my old address. When I returned I found that they had initiated a monthly fee completely unknown to me and had proceeded to drain $150 from the account. When I contacted them they were completely unsympathetic and it wasn’t until I mentioned that I was planning place more money into their bank that they were willing to waive the fee.

While one would assume that leaving a positive amount in a bank account would be safe, it really isn’t. If you have an account that you are no longer going to use, it’s better to close it completely rather than face a situation like the one above.

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Information: March 20th, 2007; 6 Responses

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Reader Comments

Comment Number:: 1
Written by:: Amy L. Fontinelle
Posted on:: March 20, 2007 at 9:10 am

You should write letters to their corporate headquarters until they refund your money. That’s just flat out robbery.

Also, in California there is apparently a state law that requires banks to close any accounts that have not had any customer-generated or written activity during a three year period. Any funds in such an account can be handed over to the state (escheated) and then you have to file a claim with the state to try and get your money back. It seems that banks will send out inactive account letters than you sign and return to them in order to maintain activity on your account and prevent the funds from being escheated, but it would be all-too-easy to miss that letter and have your money disappear. I imagine that losing money this way could be a real problem for some elderly clients whose minds aren’t as sharp as they used to be.

Comment Number:: 2
Written by:: Bob (Subscribed)
Posted on:: March 20, 2007 at 3:02 pm

I’ve seen this before too. My sister had an account a few years ago that the bank started charging a fee due to inactivity. This makes very little sense to me (as does the California law) you mentioned Amy.

Comment Number:: 3
Written by:: Cindy
Posted on:: March 21, 2007 at 5:07 pm

There’s one exception to this (keeping an old unused bank account open)…. In Britain (where my husband is from and where we lived for 3+ years) your credit rating is directly attached to your banking accounts. Basically to get a cell phone, rental agreement, credit cards, etc., you need a letter from your bank saying you are a member in good standing. Most banks won’t give you this letter unless you’ve been a member for 1-3 years.

When we first moved to the UK, I couldn’t get a cell phone (only pay-as-you-go), I couldn’t rent through most rental agencies, and forget a credit card, even though my credit rating was above 720 here in the US. Thank goodness my husband had kept his accounts open while he was living in the US.

So, if you are living in Britain and are moving overseas AND you think you might move back, it’s well worth figuring out how to keep an account open in the UK. We just transfer money online between our accounts every month so the account stays active.

Comment Number:: 4
Written by:: 80th Carnival of Debt Reduction - Millionster.com - Personal Finance, Business, Investing and Life
Posted on:: March 26, 2007 at 12:43 pm

[...] Strain presents The Dangers Of Leaving A Bank Account Open posted at Personal Finance [...]

Comment Number:: 5
Written by:: The carnivals of the day - Blunt Money
Posted on:: March 26, 2007 at 5:00 pm

[...] The Dangers of Leaving a Bank Account Open (who knew there could be a problem with that?) – Early Payoff: The Great Mortgage Debate (seeings [...]

Comment Number:: 6
Written by:: Michael (Subscribed)
Posted on:: February 27, 2008 at 2:52 pm

Bank of America nearly wiped out my savings account. I had been working abroad for a couple of years, leaving the account idle (interest payments covered services fees) so I thought I was safe. Then I received a letter through the post “This is to notify you that your account will be closed and the any funds will be transferred to the state of California unless a transaction is made within the next two weeks”. Well it had taken about a week to get here, and now I had less than a week to make a transaction. I tried our local cash machines which are linked to all the international networks – they didn’t work. I tried transferring money online – international transfers weren’t possible. I had to get my parents to go to a bank and make a international money transfer. And guess what? Not only were my parents charged a service fee for making the transfer, but Bank of America also “double dipped” by charging my account a fee!!!