5 factors before cancelling a savings account

People frequently create numerous savings accounts, either to take advantage of different savings account features or to earn a better rate of interest on their funds. People withdraw money from these accounts when their needs have been met and cease using them. The non-maintenance of funds in such accounts may result in fees. Therefore, if the accountholder has no future plans to use the savings account, it is in everyone's best interest to have it closed.

Before closing a savings account, one should keep a few things in mind. Let's go into more depth on a few of these crucial topics.

1. Review your account balance and download your statement

Check your account balance and save as many statements as you can for future use before closing a specific savings account. Your statement may come in useful while preparing your income tax return. If you close your account without keeping a backup of the account statement, you risk giving the ITR form incorrect information.

2. Cancel Automated Payments and Standing Orders

Through their savings account, people frequently give standing instructions for loan EMIs, bill payments, monthly subscriptions, etc. One should take note of any such obligation before cancelling an account and either deactivate automated payments or alter billing information for such accounts. According to Gaurav Aggarwal, Senior Director of Paisabazaar, "If there are no such mandates issued with the savings account, one may simply download the account closure form, fill out the data, and submit it to the bank's branch to shut the account without any fuss."

3. Examine Account Closure Fees

Account holders may be required to pay account closing fees for a variety of bank accounts. This often occurs when an account is closed less than a year after it was opened. However, there are no closing fees assessed if the account is closed after the first year. For instance, if the savings account is cancelled within 14 days of account establishment, SBI does not charge. However, the bank would charge you a penalty of Rs 500 as account closing fees if you cancel the savings account after 14 days but before one year. If such a time has not ended, you should refrain from cancelling your account.

4. Unlink your Savings Account from Different Portals

People link their bank accounts with these organisations to use the services offered by EPFO, the Income Tax Department, etc. You won't be able to use a number of online services, such as partial withdrawals and EPF transfers, if your bank account is not linked to EPFO. Your income tax return will not be filed if you do not include information about your bank account in the form. Aggarwal says that if you have already given the account number for the savings account that will be closed, you should update another account number before closing the account.

5. Updating Mutual Fund Savings Account Information

The money is initially deposited into the AMC's account when a mutual fund investment is redeemed. After that, it is directed to the investor's account. Your redemption will be delayed if you have submitted information about the account that you plan to terminate. It won't be cleared until you provide the updated account information, which might cause a delay in getting paid.