When Can a Bank Close Your Account? Notice and Reasons

The letter is usually short and polite: the bank is ending the relationship, names a date and asks for another account before then. A reason is rarely included. Once your account has been closed by the bank, three questions arise at once: is the bank allowed to do that? How much notice does it owe you? And what do you do now so that salary, rent and direct debits keep running? The answers are in UK and European law, and in the UK they changed on 28 April 2026.

When can a bank close your account in the UK?

A current account is legally a framework contract for payment services, governed in the UK by the Payment Services Regulations 2017, tightened by the Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025, SI 2025/688, in force since 28 April 2026. For an open-ended account contract entered into on or after that date, the bank must give at least 90 days' notice, and the notice must contain an explanation of the reasons that is sufficiently detailed and specific for you to understand why the contract is ending. It must also tell you about any right to complain to the Financial Ombudsman Service. For contracts entered into before 28 April 2026, the old rule stays: at least two months' notice.

The 90 days do not apply everywhere. A bank may end the contract without notice where it cannot apply customer due diligence under the Money Laundering Regulations 2017, where the account must be closed under section 40G of the Immigration Act 2014, where there are reasonable grounds to suspect a connection with serious crime, or where the FCA, the Treasury or the Secretary of State requires it. A shorter route, notice without delay, applies where your conduct towards the bank's staff amounts to an offence, or where you gave incorrect information when the contract was made and correct information would have prevented it.

The EU rule: two months, if the contract allows it

For readers in Sweden, Denmark, Finland and every other member state, the baseline comes from the second Payment Services Directive. Under Article 55(3) of Directive (EU) 2015/2366, a bank may terminate an account contract concluded for an indefinite period if the contract gives it that right, and with at least two months' notice. The notice must reach you on paper or another durable medium (Article 51(1)), such as your online banking inbox. Regular fees are owed only up to the closure date, and fees paid in advance are refunded proportionally (Article 55(4)).

The two months are a minimum. Article 55(6) allows each member state to adopt rules more favourable to customers, never less favourable ones.

Example: Germany. Germany transposed the rule in section 675h(2) of the Civil Code: the bank may terminate only an open-ended contract with an agreed right to do so, with at least two months' notice, and it may not charge for the termination itself. The German Federal Court of Justice has held that private banks need not weigh their interests against the customer's before an ordinary termination, while public savings banks, bound by fundamental rights, need an objective reason.

Must the bank give a reason?

In the UK, yes, for new contracts. For accounts opened from 28 April 2026 the notice must explain the reasons specifically enough for you to understand them. The exception is where another legal requirement prevails, for example the ban on tipping off where a suspicious activity report is involved. For older contracts there is no statutory duty to give a reason for an ordinary closure with notice.

In the EU, generally no. The Payment Services Directive does not require a reason for an ordinary closure with notice; whether one is needed depends on national law and the type of bank, as the German example shows. The basic payment account is the exception: it may only be closed on the grounds the law lists, and the bank must explain them in writing (more below).

Alongside closure with notice there is, as the exception, immediate termination for serious cause, for example after false information at opening or use of the account for unlawful purposes.

Reasons why banks close accounts: the short version

Even where no reason has to be given, the reasons why banks close accounts can be narrowed down. They almost always follow from the bank's own legal duties or its risk policy:

Unanswered anti-money-laundering questions about the source of a payment, the purpose of a business or the beneficial owner.
A move abroad to a country not on the bank's internal list. For EU residents a further rule arrives on 11 January 2027: under Article 21c of Directive (EU) 2024/1619, banks from outside the EU need a branch in the member state for core banking services there; contracts concluded before 11 July 2026 are not affected. What that means for an account abroad is in CRD VI for EU residents.
US tax status, because FATCA adds reporting work for the bank.
A profile that no longer fits: business payments through a personal account, a high-risk sector, payments to countries on the bank's risk list.
A rejected change of terms, or an account that has been dormant or unprofitable for years.

A closure does not mean you did anything wrong; it is often a risk or cost decision. Who is hit most often, why complaints rarely bring the account back and why the same models run at every high-street bank is covered in Debanked: why UK banks close accounts; how banks grade customers who live abroad is in Why banks reject non-residents.

Why banks drop customers who did nothing wrong

A closure is rarely a judgment on you. It is a cost decision. Every relationship carries compliance work: identity checks, transaction monitoring, periodic reviews, source-of-funds files, sanctions screening. A salaried customer with one domestic payment a month costs little to monitor. A customer with a foreign address, income in three currencies, a holding company or an old transfer from a crypto exchange costs far more, while the margin on an ordinary current account stays thin. When the expected revenue of a whole segment no longer covers the compliance work and the regulatory exposure, the segment goes. The industry calls this de-risking: the risk is not managed, it is removed from the books, and the customer with it.

Some features make a file expensive almost automatically, without saying anything bad about the customer:

Political exposure. UK banks must have systems to identify politically exposed persons, their family members (spouse or civil partner, children and their partners, parents) and known close associates, and must manage the enhanced risk (regulation 35 of the Money Laundering Regulations 2017).
A foreign address or tax residence, which brings cross-border tax reporting and more documentation at every review.
Layered structures: an operating company under a holding company means beneficial owners to identify and a structure to explain, again, at each periodic review.
Crypto-related inflows, even old, declared ones from a regulated exchange, which screening tools can flag years later.

What the regulators have found fits this picture. The FCA's initial findings of 19 September 2023 named inactive or dormant accounts and concerns about financial crime as the most common reasons for closures, and found no firm that had closed an account between July 2022 and June 2023 primarily because of a customer's political views. In its update of 4 September 2024 it asked firms to review their overall approach to account denials and closures and to have a clear, properly considered definition of reputational risk. In the EU, the European Banking Authority warned in its de-risking guidelines of March 2023 that dropping entire categories of customers without regard to the individual can be unwarranted. None of this gives you a right to keep the account, but it explains why the letter so often arrives without a word about your conduct.

Answering the bank's questions without hurting your file

Many avoidable closures follow not from who the customer is but from how the customer answers. A question about the source of funds or the purpose of a payment is not small talk: someone is completing a file, and the file gets scored. Answer promptly, completely, in writing and with documents rather than stories. Make sure what you tell one bank matches what you told the last one, because inconsistency is itself a flag. Never treat the questionnaire as an insult; one ill-tempered email can end a relationship that was still salvageable.

And keep your affairs explainable in one paragraph. If your own adviser needs a whiteboard to explain why your money moves the way it does, an analyst with a few minutes per file will not follow it either, and the doubt will be resolved against you.

The basic account: closure only on listed grounds

In the UK, designated banks offer basic bank accounts under the Payment Accounts Regulations 2015. Under regulation 26 such an account may only be closed on listed grounds: among them no transaction for more than 24 consecutive months, the customer no longer being legally resident in the UK, a later eligible UK payment account, knowing use for illegal purposes or incorrect information at application. For closures on the first three of these grounds the bank must give the grounds and justification in writing, free of charge, at least 90 days ahead for contracts from 28 April 2026 (two months for older ones), and tell you about your right to complain to the Financial Ombudsman Service.

In the EU, every consumer legally resident in the Union, including people with no fixed address and asylum seekers, has the right to a payment account with basic features, under Article 16(2) of Directive 2014/92/EU. Article 19 of the same directive limits closure to deliberate use for illegal purposes, no transaction for more than 24 consecutive months, incorrect information to obtain the account, loss of legal residence in the EU or a second basic account in the same country, plus limited national grounds against abuse. For inactivity, loss of residence or a second account the bank must inform you of the grounds in writing, free of charge and at least two months in advance, and tell you how to complain and how to reach the competent authority and the alternative dispute resolution body.

Example: Germany. The bank must offer the basic account contract within ten business days of the application (section 31(2) of the Payment Accounts Act). Under section 42 it may also close a basic account with two months' notice where the customer is more than three months in arrears with a not insignificant part of the fees, the arrears exceed €100 and further unsecured claims are expected; immediately only where the customer intentionally uses the account for unlawful purposes or gave false information to obtain it.

The basic account is the safety net: no one entitled to one has to be left without an account, even after a closure.

Switzerland: different rules

Switzerland is bound by neither the EU directive nor the UK regulations. The individual bank's contract terms decide, so read them before a Swiss account becomes your main account.

What to do within the notice period

The letter has arrived. These steps have proved their worth, in this order:

Check the date and the notice. Work out whether the time between receiving the letter and the closure date meets the minimum: 90 days for a UK contract from 28 April 2026, two months otherwise. For a basic account, check whether one of the listed grounds is named.
Answer open questions. If the bank has an unanswered question, about the source of a payment for example, answer it fully and with documents. Some closures are withdrawn once the gap is closed, though there is no right to that.
Open a new account at once. Opening takes time, especially if you live abroad.
Move your payments. Salary, pension, rent, direct debits, standing orders: list them and work through them. Download your statements while you still have access.
Secure the balance. Give the bank an account in good time for the remaining balance.
Complain where it makes sense. In the UK, complain to the bank first and then to the Financial Ombudsman Service; in the EU, go to the dispute resolution body named in your bank's terms. With an ordinary closure that met all the rules, the chances are slim.

When to fight, and when to walk

Fight when there is something to win. If the closure would leave you without a basic account where you live, rely on the statutory protections above and the ombudsman route. If the notice is shorter than the rules allow, or a UK notice for a contract from 28 April 2026 gives no real reasons, push back in writing and escalate. If the stated reason is demonstrably wrong, correct it with documents.

Walk when the relationship is dead. If the bank has decided, at policy level, that your whole category is unwanted, no complaint reverses that; at most it buys you a few weeks. And where a closure touches a suspicion of financial crime, the bank may not tell you so, which means months spent fighting a decision whose real basis nobody is allowed to explain. Use the notice period to complete the move instead.

After the closure: never just one account again

The lesson from any closure is organisational: anyone who keeps everything at one bank depends on one decision. A second account, ideally in a different legal system, keeps you able to pay when the first one goes. For business owners this matters twice over, as the case of the business account closed by a fintech and the plan B shows.

A sound baseline has three legs:

Never only one bank, however long the history. The second account turns a closure letter from a crisis into an administrative task.
Never only one country. A second domestic bank protects you from one institution's risk appetite, not from a sector-wide policy shift or a change in how your whole customer category is scored in that market. Real resilience means at least one working account in a second jurisdiction, opened and used before you need it. Which one fits depends on your residence and profile; the destinations overview compares them.
Never all payment flows through one provider. This is the leg most people forget. If salary, mortgage, card spending and business receivables all run through one institution, that institution holds your whole financial routine, whatever your balances elsewhere. Keep a card from a different provider, and if you run a business, keep a second payment route ready.

Redundancy looks inefficient until the day the letter arrives. Then it is the cheapest insurance you ever bought. Holding accounts abroad is legal; the income on them stays taxable where you live, and none of this is about hiding anything.

And after a closure, do not apply to five banks at once: every rejection leaves a trace in the banks' records and makes the next attempt harder.

Frequently asked questions about account closure by the bank

How much notice must a bank give before closing my account? In the UK, at least 90 days for account contracts entered into from 28 April 2026, and at least two months for older ones. In the EU, at least two months for an open-ended account contract that gives the bank the right to terminate.

Can a bank close my account without giving a reason? In the UK, not for contracts entered into from 28 April 2026: the notice must explain the reasons in enough detail for you to understand them, unless the law forbids it. In the EU, an ordinary closure with notice generally needs no reason, but a basic account may only be closed on the grounds the law lists.

Can a bank close my account immediately? Only in exceptional cases: for example where the bank cannot complete its anti-money-laundering checks, where it suspects serious crime, where you gave false information to open the account or used it for unlawful purposes.

Does the closure cost me anything? Under the EU rule, regular account fees are only owed up to the closure date, and fees paid in advance are refunded proportionally. In Germany the bank may not charge for the closure itself.

Am I still entitled to an account after a closure? In the EU, every consumer legally resident in the Union has the right to a basic payment account. In the UK, designated banks offer basic bank accounts, which they may only close on the grounds set out in the Payment Accounts Regulations 2015.

If your account has just been closed, or you want to spread your money across two independent accounts before it happens, we talk through the right routes in the free consultation.

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