When a bank receives a deposit for a closed account, the bank can either accept the deposit and apply it to the account or reject it. The method used to deposit the funds and the time that has passed since the account was closed normally have an impact on how the bank handles the deposit.
You can reopen a closed bank account if you make a deposit to that account before the bank purges it from its records of active accounts. Accounts are normally purged within a few weeks of being closed, although this time frame varies from bank to bank. Many people forget to redirect their direct deposits when they close their bank accounts, and if a direct deposit arrives at a bank within a few weeks of an account closure, most banks accept the funds and this deposit causes the account to reopen. Banks reject direct deposits that are processed after an account has been purged.
Some account holders deposit checks by mail, and it can often take several days for a check to arrive at the bank due to delays with the mail service. Generally, banks do not accept mailed check deposits on closed accounts. However, if a bank does not accept the deposit, it has to mail the check back to the sender. If for some reason the bank does not know the origin of the check, bank employees may choose to deposit it into the account due to a lack of other options.
If you overdraw your bank account and fail to settle the debt, your bank can close your account and report the account as a delinquent debt to the credit reporting agencies. If your bank receives a deposit by mail, electronic transfer or other means for your closed account, your bank can apply those funds to your unpaid overdraft. This usually occurs on recently closed accounts, as older accounts are purged from the computer system and tellers would not realise that the account had been overdrawn when it was closed.
After you close a bank account, make sure to read your last bank statement and check with the bank after a few months to make sure that the bank does not reopen your account. Your bank could reopen your account to deposit a small check, but if you never use the account your bank can assess inactivity fees and over time these fees could deplete the account balance and cause your account to go into the negative. Therefore, you should make sure that all of your deposits and withdrawals are accounted for when you close your accounts.