If My Bank Account is Closed, What Happens to My Direct Deposit?

There’s always a possibility that you may need to close a bank account for some reason or another. When that happens, a lot of questions can arise.

For example, if my bank account is closed, what happens to my direct deposit? If you aren’t sure about the answer to this, you’re in the right place.

I’ll walk you through this process, so you don’t have to worry about losing the money you are entitled to.

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What Happens if Your Direct Deposit Goes to a Closed Account?

You might be concerned that if your account is closed, any money sent to you by direct deposit will somehow get lost, and you’ll never get it. This isn’t true.

If direct deposit money is sent to a closed account, the funds may be returned to the original sender. While it might not go directly to you, it also will not be lost, and you need to get the sender your new account information.

This is usually how things will go with a closed account, although a couple more things can happen. We’ll look at those situations in more detail later.

How Long Will a Bank Hold a Direct Deposit with a Closed Account?

This will be determined by the bank’s policy, so there can be some differences depending on what bank the account was with. But in most cases, the money will be returned somewhere between 4 and 10 days.

If you are unsure, contact the bank and ask what their rules are about this. There’s no reason not to ask, and it may help you feel better if you’re anxious about the money.

What Happens to my Stimulus Check if my Bank Account is Closed?

Getting your stimulus money quickly is obviously a high priority. But it could be more complicated if the bank account on file is closed. What happens to your money then?

First, the money will be sent back to the IRS. After that, they will mail you a check instead of getting you the money through the account.

While it may take a bit longer, you’ll still get your stimulus check. Now that you know this, there’s no need to worry if you can’t get your stimulus check through an account.

But remember, if you are expecting stimulus money, you should make sure all your financial information is updated.

Can Money be Added to a Closed Account?

Banks handle this matter in different ways, so it’s best to check with them directly. But generally, the money will be sent back where it came from.

In other cases, the bank may hold the funds for a time or send a check to you. Ask your bank if you are unsure about their policy. 

What Should I Do if My Direct Deposit is Going to a Closed Account?

Money cannot generally be sent to a closed account. To get your money, you need to obtain a check from your employer, client, or whoever is sending you the money.

Let them know that the account is closed and not the correct place to send money anymore. As soon as you have an updated account, share the information with them so you can get back to direct deposits as quickly as possible.

What Happens to Money Paid into a Closed Bank Account?

A few things can happen with your money when it is sent to a closed account. Since the funds cannot be added to an account that’s already closed, it has to go somewhere.

One of the following will generally happen, some of which you know, but here’s a recap:

  1. The bank will usually return money to the sender. That way, the sender isn’t missing money that never got to the intended person in the first place. 
  2. The bank may hold the funds until you contact them. If this is the case and you think your direct deposit may have been sent, contact your bank as soon as possible. They can inform you of the next steps to take.
  3. The bank may issue a paper check to the address on file. It’s essential to ensure your address information is correct before closing an account, just in case the bank has a policy of mailing checks for direct deposits that don’t go through. If you think your address is incorrect, contact your bank to inform them.

How Many Days for a Bank to Reject a Deposit on a Closed Account?

As with a lot of things, the bank’s policy about this matters. To know for sure, you should call or contact your bank to determine how long a deposit rejection takes.

But since it usually takes between 4-10 days for the money to return to the sender, you can reason that they’ll reject the deposit before this point. It’s still important to ask if you have been waiting a while or the answer is unclear.

Will a Direct Deposit Reopen a Closed Bank Account?

Typically, no. But it is definitely worth asking about.

In some cases, though probably not often, an account may be reopened from a direct deposit. Find out what is typical, so you know what to expect with your situation.

Don’t Panic if Your Money is Deposited Into a Closed Account

Money stress is very normal. According to this study, 58% of Americans think that money is what guides their lives.

But since stress isn’t great for anyone, don’t become panicked. You will get the deposit eventually.

Although since you may need the cash to pay bills in some cases, it’s vital to be proactive by informing your workplace of changes to your account. 

If you have the option, try to talk with someone at your bank about policies before your account closes. But if you do find that your direct deposit went to a closed account, you’ll be able to get it back.

Check with your employer and your bank, and don’t worry. Your money will not disappear, and with this extra knowledge, you’re much better informed to make decisions and get your deposit quicker.

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Steffa Mantilla

Certified Financial Education Instructor

Steffa is a Certified Financial Education Instructor (CFEI) and the founder behind Money Tamer. Her 12-year background in operant conditioning and positive behavioral change training is used to help people find effective motivators to change their harmful money behaviors. Steffa explains the reasons “why” behind people’s financial behaviors and how to successfully change them. After paying off over $80,000 in debt through budgeting, she now teaches families how to get their own finances in order. You can learn more about her here.

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