My bank closed my account. What now?

Banks close accounts for commercial, risk and legal reasons. Commercial reasons include the account being unprofitable or the bank exiting a product, customer segment or country. Risk reasons are the most common for businesses: activity that does not match what was declared at opening, payments to or from higher-risk countries, a sector the bank has decided to avoid, such as crypto, gambling, money services or adult content, unexplained cash deposits, or customers and counterparties the bank's screening flags.

Legal and regulatory reasons include failing to respond to a periodic review or 'know your customer' refresh, sanctions screening matches, and concerns the bank may be legally prevented from discussing. Many closures follow an unanswered request for updated documents, which is the easiest kind to avoid.

Banks often give little or no explanation. Sometimes this is policy; sometimes it is legal. Where a bank has filed a suspicious activity report, anti-money-laundering laws in many countries prohibit it from telling the customer, which is called 'tipping off'. That does not mean every unexplained closure involves a report, but it explains why staff often cannot say more.

In some countries, rules require banks to give notice before closing an account, often around two months for payment accounts in the UK and EU, except in specific cases such as suspected fraud or a serious breach of terms. Check your account terms and your local regulator's guidance for the rules that apply to you.

In a standard closure with notice, you keep full access during the notice period and the bank pays out or transfers the remaining balance when the account closes. Use the notice period to move direct debits, update customers with new payment details and open a replacement account.

Where the bank has frozen the account, for example while investigating, access can be restricted with little warning. The bank may ask for evidence of the source of specific funds before releasing them. Respond promptly and completely, keep copies of everything you send, and ask in writing what is required to release the balance and how long it will take.

You can ask the bank to explain and reconsider. Put the request in writing, describe your business or personal circumstances, and supply evidence that addresses any likely concern: contracts, invoices, licences, tax returns or proof of source of funds. If you believe the bank has acted unfairly or broken its own terms, use its formal complaints process. In many countries an independent ombudsman or regulator can then review the complaint, such as the Financial Ombudsman Service in the UK.

Banks generally have the right to decide whom they serve, so complaints succeed more often on process, such as missing notice or unreasonable delays in returning funds, than on forcing the bank to keep the account open.

New banks will usually ask whether you have had an account closed. Answer honestly. Prepare a clean file: identity and address documents, company documents for a business, a clear description of what you do, expected monthly volumes, main countries of customers and suppliers, and evidence of source of funds and wealth. If you can identify the probable cause of the closure, explain what has changed.

Institutions differ hugely in risk appetite. A business in a sector one bank avoids may be routine for a specialist bank or a licensed e-money institution. For businesses with international owners or customers, combining a local bank with an e-money account or an account in another jurisdiction often gives more resilience than relying on one provider.

The practical damage from a closure usually comes from the disruption rather than the decision itself. Start by listing every flow that touches the account: customer receipts, card processor payouts, payroll, tax payments, rent, supplier payments, direct debits and subscriptions. Rank them by urgency. Payroll and tax deadlines come first, followed by the incoming payments that keep cash flowing.

Open a replacement as early as possible within the notice period, even a basic e-money account, so that payment processors and customers have somewhere to send money. Update the bank details with your card processor and marketplaces first, because payouts sent to a closed account can take weeks to recover. Then tell customers and suppliers, ideally on your letterhead with the new details and a way to verify them, since changed bank details are a common fraud pattern and careful customers will want confirmation.

Keep records of the closure notice, your correspondence and the final statement. If the closure was linked to a periodic review, keep copies of the documents you provided. These records make the next onboarding easier and are useful if you later need to complain. Finally, avoid running everything through a single provider again. Two accounts at institutions with different risk models give you time to react if one of them changes its mind.

Xavion works with businesses and founders whose accounts have been closed to understand the likely cause, prepare an honest onboarding file and approach institutions whose appetite fits the business and its owners. We focus on lawful, properly licensed activity. We do not guarantee approval, we do not help conceal a past closure or the source of funds, and we will tell you plainly if something needs to change before another institution is likely to accept you.