Did your bank close your account without warning? Here's what you can do

It may sound unlikely, but yes, a bank can close your account without your authorization. In fact, a bank can close your account at any time for any reason, even without any prior warning. How often that actually happens remains murky — no central dataset tracking bank account closures exists, and statistics such as the number of Suspicious Activity Reports (SAR) banks file to the federal government or complaints consumers make to the CFPB about account closures can't give a definitive answer to the scope of this practice.

But if your bank happens to close your account, you likely don't care too much how many others experience the same situation. You just want to know what happens next to you and your money. Below, CNBC Select dives deeper into bank account closures, including how you can prevent them in the first place.

• What happens when a bank closes your account?
• Why did the bank close your account?
• What to do when the bank has closed your account
• How to avoid having your bank close your account
• Bottom line

If a bank closes your account, it isn't required to notify you, so you might not receive a notification informing you of the closure. However, the bank is required to return any money that may have been in the account, which may be received in the form of a check or deposited into a different account that the bank has opened for you instead.

While closing a bank account typically doesn't have a direct impact on your credit score (like, say, having your credit card closed on you), it could become a problem if your account has any outstanding balances, such as unpaid overdraft fees. In such cases, the bank might send this debt information to a collection agency, leading to a negative report on your credit by the credit bureaus and ultimately resulting in a significant drop in your credit score.

There are various reasons why a bank may close your account. Here are some common reasons:

Not enough activity with your account 

According to the deposit agreement accounts of major banks such as Chase, Wells Fargo and Bank of America, a bank may close your account if you maintain little to no activity and keep it at a zero balance. Even if you maintain a balance but rarely engage in any activity such as online transfers or deposits for an extended time your bank may consider your account dormant and close your account.

According to HelpWithMyBank.org (a website run by the federal agency charged with regulating national banks), an account is considered abandoned or unclaimed when there is no customer-initiated activity or contact for a period of three to five years.

Excess overdraft fees 

Overdrawing your account is never a good thing, and at the least will result in a payment not going through. And depending on how often you overdraw your account, you can end up paying multiple overdraft fees. Many checking accounts also don't charge overdraft fees or minimum balance requirements, such as the Capital One 360 Checking® Account or the Betterment Checking Account.

Yet another reason you should avoid overdrawing is the possibility of your account getting closed (even if you have overdraft protection). Banks tend to take action if they notice a consistent negative balance or failure to address it. These consequences are also typically outlined in your account's terms and conditions, so be sure to review them.

Fraudulent activity 

If a bank suspects that you've been a victim of identity theft, it may close your account to protect against any further fraudulent activity. This suspicion usually arises during cases such as frequent or significant money transfers or withdrawals.

If your bank account has been closed and you're unsure why or you're concerned about your money, you should take the following steps:

• Contact your bank immediately: If you haven't been notified of the closure, you should get in contact with your bank and find out what you need to do to receive your funds ASAP.
• Stop direct deposits and automatic withdrawals: If you have any direct deposits or automatic withdrawals in place, cancel them immediately. For example, if you receive direct deposits from your job, you should make sure to redirect the deposit to another account or opt to receive by check until all has been settled.
• File a complaint: If you believe your account was wrongly closed, you can submit a complaint to the federal Office of the Comptroller's Customer Assistance Group.
• Explore other options: If your account's been closed, look into opening a different type of account either at the same bank or a different bank. Whether you open an account with a different account depends on your situation, so be sure to contact your bank and see if they're willing to either reopen your closed account or allow you to open a new one. However, if the bank is unable to help you if, for example, your account was closed for excessive overdraft fees, you may need to consider second-chance bank accounts.

You can lessen the risk of your account being closed by doing the following:

• Monitor any scheduled payments or automatic withdrawals to ensure you have sufficient funds available
• Enroll in text or email notifications to alert you when your balance falls below a certain amount
• Link your accounts so that your funds can be easily transferred if the balance in one account drops
• Regularly review your monthly bank statements and check for possible errors

Another step you can take is to contact your bank in advance if you anticipate withdrawing large amounts of money that the bank may find unusual.

"If you know that you're building a house and you're going to have significant outflows [of] wire transfers and sale payments to the contractor or a group of contractors, it helps to talk to your bank ahead of time," says Jerry Dubrowski, a spokesman for JPMorgan Chase. "So if you're doing something out of pattern, it helps to talk to your bank ahead of time."

Checking account fees can quickly eat away at your balance and signing up for a no-fee checking account can help with that. CNBC Select ranked the Alliant Credit Union High-Rate Checking as the best checking for out-of-network ATMs which also comes with a $0 maintenance fee and no minimum balance required. The Ally Interest Checking Account also doesn't require a minimum deposit to open an account, as well as a $0 maintenance fee and no minimum balance requirements.

Having your bank account unexpectedly closed can be highly inconvenient. However, you can reduce the risk of it happening by taking proactive steps such as actively monitoring your account and ensuring it has sufficient funds.

And if your bank still closes your account, make sure to contact them immediately to find out why and what you need to do to receive your funds.

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Jerry Dubrowski, a spokesman for JPMorgan Chase.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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