We Have Bad News For You – Your Account Is Terminated
Why Banks Close Personal Accounts — And How to Protect Yourself
You do everything “right”:
✅ Never overdraft
✅ No debt
✅ No complaints
…and suddenly you try to log into your banking app and learn that your access has been limited, because your account was terminated. You try to figure out what happened since you haven't received any letter. It's Friday afternoon and after a panicky call that confirms the termination, your bank is finally nice enough to send you a letter into your online banking inbox:
“Sorry, we don't have good news for you today. We have decided to terminate our business relationship with you.”
This just happened to me last Friday after 15 years of being a customer at ING DiBa — and it happens to thousands of people every year. In the EU, they typically have to give you 2 months notice. That's doable, but still causes absolutely unnecessary stress.
And it makes your heart sink, because we all know how much our entire life hinges on bank transfers. Rent payments need to be made on time, water, internet, phone and electricity bills are being paid from this account. Your credit card is hooked up to this account. In my case, my investment account was also at ING DiBa, so not only did I have to find a new bank, I also needed a new broker.
So here's a quick guide about what to do when this happens to you.
Let’s break it down:
✅ Why banks close personal accounts
✅ Why being a “good customer” can work against you
✅ How to protect yourself with simple backup accounts
✅ What to watch out for when looking for a new bank — including hidden costs and practical downsides
🏦 Why Banks Close Personal Accounts — Even When You Do Everything "Right"
Banks don’t make money from you being responsible. Here’s how they actually make money:
Interest on debt (loans, overdrafts, credit cards)
Fees on overdrafts and account maintenance
Commissions on financial products (insurance, investments)
Transaction fees (especially on credit cards)
If you:
Don’t borrow money
Don’t pay for “premium” features
Avoid overdrafts
Rarely use credit
…then you are not profitable to your bank.
That makes you a target when banks review their customer base to cut costs.
🚫 Common Reasons for Personal Account Closures
Low profitability — banks cut accounts with minimal revenue
Policy changes — banks regularly change strategy and remove retail clients
Cost-cutting — fewer clients mean fewer service costs
Risk flags — e.g. frequent foreign transactions, high cash usage
Good behavior doesn’t protect you.
Profitability and risk calculations do.
🌍 How to Protect Yourself: One Country, Two Accounts
You don’t need multiple accounts in different countries — one country is enough.
But here’s how to stay safe:
✅ 1. Keep a Backup Personal Account
Have your main account for everyday use
Open a second personal account with another bank (not a branch of the same bank). You can use this account as your emergency fund.
This way, you always have access to money if one account gets closed.
✅ 2. Separate Accounts for Savings/Investments
As I said before, don't keep your emergency savings in the same account as your daily spending (and you should absolutely have an emergency fund that is liquid and that you can access when something unexpected happens!!)
Use a separate bank and a separate account for savings and for investment deposits (e.g. ETF brokers)
So all in all, you have three accounts, two regular bank accounts (one for daily spending, one for your emergency fund) and one investment account.
✅ 3. What to Look For in a Backup Bank
| Feature | Why It Matters |
|---|---|
| No monthly maintenance fee | Saves money long-term, but it could also make sense to pay a low monthly fee to make you a more profitable client and avoid the risk of being purged |
| Free basic card | Avoid hidden card costs |
| Good online banking app | Avoid hassle managing it |
| Simple cash withdrawal terms | No extreme ATM fees in your home country and abroad, especially when you travel a lot to countries that are cash-based, make sure that cash withdrawal is a) supported by the bank and b) cheap |
| Low transfer fees | Especially for international use |
| Clear terms on account closure | Check if they purge inactive accounts, look up news about the bank. Sometimes, there are reports of mass purges. |
🧾 Checklist Before Opening a Backup Account
💡 Will I use it regularly or just as a backup?
💡 Do I want a card attached or just transfer access?
💡 Do I travel frequently and need cheap cash withdrawals?
💡 How often will I check this account?
💡 Do I have clear rules for myself to keep it active, automate payments to keep it simple (e.g. move €10/month or the required minimum if the bank has one to keep the fees low or even free)?
👎 Downsides of Having More Than One Bank Account
Having a backup account is smart — but it comes with downsides:
| Downside | How It Affects You |
|---|---|
| More admin work | You have to monitor multiple accounts |
| Not everything at a glance | No single overview of your financial situation |
| Risk of neglecting the account | Some banks close inactive accounts after 12 months |
| Overcomplicating simple money flows | It’s easy to forget transfers or let small amounts sit idle |
Solution: Set a monthly reminder to review all accounts and automate small recurring transfers to keep backup accounts active.
Summary: Build a Simple but Resilient Setup
✅ Two banks are better than one
✅ Keep everyday spending and savings/investments separate
✅ Use backup accounts to protect against sudden closures
✅ Stay aware of hidden fees and activity requirements
✅ Keep things simple enough that you actually manage it well
Resilience doesn’t have to be complicated. The good thing is that you have a relatively long time to find a new bank, two months is plenty. The transfer of your money is free and so is the transfer of any investments to another bank or broker.
Next up, read about how to choose an investment broker platform.
