What happens if money is sent to a closed account?

Funds can get sent to a closed account for different reasons — and while these types of misdirected payments can lead to delays, they usually aren’t lost forever.

Learn the potential consequences of money being sent to a closed account and things to consider for avoiding misdirected payments.

The receiving bank rejects the transaction

If a bank receives a transfer or direct deposit to a closed account, it may reject the transaction outright. Depending on how quickly this happens, the money may never leave the sender's account, or it may get returned several days later.

The bank or service that sent the money may quickly learn about the failed transfer. Once it does, it can alert the sender that the transfer didn’t go through because the receiving account was closed.

However, it can still take several days or weeks for the process to play out, and the sender may not have access to the funds during this time. If the sender is an employer, they may decide to send the employee a check immediately.

The receiving bank accepts the transfer

The receiving bank may see that the money is intended for a closed account and decide to accept the money anyway. If it does, the bank doesn't get to keep the money.

The bank may take a couple actions. They may contact the intended recipient and issue a check. Sometimes a bank may reopen — or allow the recipient to reopen — the account to claim the funds. However, this may not be a commonly available option unless the account was recently closed.

Potential ways to avoid misdirected payments

To help avoid misdirected payments and the resulting delays, people can:

• Update their employer and any connected apps, such as cash back apps and online marketplaces, after closing a bank account.
• Review their account information before depositing a check or requesting a money transfer or wire transfer.
• Double-check the account information and ask whether the account is still open before sending money to someone else’s bank account.

Although mistakes may still occasionally happen, rest assured the money isn’t lost forever. Even if it takes several weeks, the funds can eventually make their way back to the sender or get passed on to the recipient.

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