Unused Bank Account Alert: Hidden Charges You Should Know
Inactive Bank Account? It Could Be Costing You More Than You Think: Many of us have old bank accounts we no longer use- a salary account from a previous job, a zero-balance account opened during an offer, or an old joint account. We often think, “It’s empty, so what’s the harm?”
But a forgotten account can quietly create financial problems. It may slowly eat into your money and even put your credit score and security at risk.
Minimum Balance Penalties: If you don’t maintain the required minimum balance, banks may charge a penalty every month. You might not even notice it happening. Over time, your balance can drop to zero or even become negative.
If there are no transactions for a long period, the account becomes inactive or dormant. Reactivating it usually means visiting the branch and completing paperwork.
Credit Score and Payment Risks: A regular savings account doesn’t directly affect your credit score. However, linked services can create trouble.
If your account has an overdraft (OD) facility and charges or interest keep adding up, the bank may treat it like unpaid debt. This can hurt your credit score (CIBIL).
Old accounts are sometimes linked to insurance payments, demat accounts, or EMIs. If you ignore them, important payments may bounce.
Risk of Cyber Fraud: An unused account that you don’t monitor can be an easy target for fraud. If your phone number or email has changed and you haven’t updated it, you won’t receive alerts about suspicious activity.
Keeping fewer, active accounts makes your finances safer and easier to manage.
Before Closing an Old Account: If you decide to close it, take these steps:
Download statements: Get statements from the last 2–3 years for tax or visa needs.
Check linked services: Make sure there are no auto-debits or government benefits connected to the account.
Close it properly: Just withdrawing money isn’t enough. Visit the bank, fill out the closure form, and get written confirmation. Destroy your debit card and return your checkbook. Closing unused accounts on time can save you from unnecessary stress and financial loss.
