Can You Close a Bank Account with a Negative Balance?


Something that often confuses many people is exactly how banking works. Monitoring the balance of your current account is easy enough, but as soon as you throw overdrafts and negative balances into the mix, it quickly becomes confusing.

When some people see a negative figure in their account, it can cause them to panic, and you might find yourself tempted to close the account. 


But is this actually possible? Can you close a bank account with a negative balance? In this guide, we’ll be answering these questions and more. So, if you want to find out more about this, then keep on reading. 

Can You Close A Bank Account With A Negative Balance?

No, in most cases, you will not be able to close a bank account that has a negative balance. This is because that negative balance is the figure that you owe to the bank, so, it would not make sense for them to allow you to close it without settling the negative balance.

If the bank were to allow you to close a bank account with that negative balance being settled, then they would be losing money. So, no, you cannot close a bank account that has a negative balance. 

You can only close a bank account with a negative balance if you settle this balance with your bank. To do this, you should visit your bank and speak to them specifically.

If you have the money, then you should settle this figure with your bank. If you do not have the money available, then you might be able to speak to your bank to figure something out. 

What Happens When You Close A Bank Account With A Negative Balance?

As we have said, generally, banks do not allow you to close accounts that have a negative balance. This is because that negative balance is money that you owe the bank, so they will not allow you to end your service with them until that balance has been settled.

Banks offer overdrafts in good faith that you will repay the money that they give you. So, if you do not do this, the bank will not allow you to leave until that negative balance has been resolved. 

However, this doesn’t mean that you cannot apply to close an account that has a negative balance. This request will be processed, but it will almost always be rejected, as the bank will not allow you to leave until you have repaid the money they owe you.

So, you can apply to close your bank account that has a negative balance, but you probably won’t be able to actually close it. 

Can You Go To Jail For A Negative Bank Account?

While a negative bank account isn’t a good thing, it also isn’t a criminal offense. This is, of course, dependent on the fact that you honor the terms and conditions of the overdraft that is applied to your bank account.

When you open up a bank account, there will be lots of terms and conditions that you accept. These will also include rules for your overdraft, so, as long as you follow these, you shouldn’t ever face criminal prosecution for having a negative bank account. 

However, technically speaking, jail time can be imposed for a negative bank account. Most States have laws that mean this can happen.

But, these criminal charges can only be imposed for very specific reasons for overdrawing your account, so in most cases, you will not face any criminal charges for overdrawing your account. After all, most banks offer overdrafts as part of their services. 

How Long Can My Bank Account Be Negative Before Its Close?

As we have said, banks generally do not accept applications to close a bank account that is overdrawn. So, if you apply to close your bank account in an attempt to get rid of your negative balance, your attempts will be unsuccessful.

However, banks do not keep bank accounts open indefinitely. Even if the account has a negative balance. So, if your account is inactive for a prolonged period, if you overdraw it too many times, or it stays in a negative figure for too long, the bank may close your account. 

But, it is important to recognize that the bank closing your overdrawn account isn’t necessarily a good thing for you financially. Even if the bank writes off that money, it will still be acknowledged that you failed to settle it, and this will negatively affect your credit score for a long time. 


In short, this has been a complete guide to answer the question ‘can you close a bank account with a negative balance?’. We’ve looked at lots of different information to answer this question, so if you want to find out more, then read this guide. 

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