Your Bank Closed Your Account in Canada. What Now?

Canadian law gives you the right to open a bank account. It gives you no right to keep one. That’s why the letter arrives with a date on it and no explanation: your account agreement almost certainly lets the bank end the relationship whenever it chooses, and nothing in the Bank Act overrides that.

You’ll usually get 30 days. Inside that window you need a new account open, your pay redirected and every automatic payment moved. Below is how to do it in order, and what your recourse actually is once the money is safe.

It’s more common than it looks. Canada’s banking ombudsman has opened 419 “relationship ended” cases (opens in a new tab) in the near six years since November 2019, 94 of them in 2024 alone, and those are only the people who took it all the way to an ombudsman.

Can a bank close your account without telling you why?

Yes. No Canadian law requires a bank to give a reason, and most account agreements let it close the account at any time. The ombudsman’s published approach to these complaints (opens in a new tab) says banks aren’t required to explain a closure and generally don’t, and OBSI can’t tell you the reason either.

Often the bank isn’t allowed to tell you

When a closure follows a suspicious transaction report, the bank has a criminal statute to worry about. Section 8 (opens in a new tab) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act says no person or entity may disclose that such a report was made, or its contents, with intent to prejudice a criminal investigation. That’s the no-tipping rule, and because nobody at a branch can judge where the line falls, compliance policy treats the whole subject as off-limits. The person at the counter usually doesn’t know anyway: the call came from a risk team the customer never speaks to.

Scrutiny tightened sharply after TD paid about US$3.09 billion in October 2024 (opens in a new tab) over anti-money-laundering failures, the largest bank in US history to plead guilty to those charges. Every other Canadian bank then reviewed how much risk it was willing to take. Regular international transfers, crypto exchange activity, a cash-heavy small business, cheque cashing for other people: all of it scores as risk in that kind of review, whether or not anything is actually wrong.

How much notice you should expect

Thirty days, and that’s what OBSI calls typical. Where a bank gives that much, OBSI generally recommends no compensation, because you had time to move your banking. Some closures come with less. A few come with none at all, and the first you hear is a draft in the mail.

So write down the date on the letter and the date access ended. If the gap is shorter than 30 days, or shorter than what your account agreement promised, that’s the one part of a closure a complaint can genuinely win something for.

What should you do in the first 48 hours?

Get the closure date in writing, confirm how your balance is coming back, and download your statements before online access disappears. Access usually survives until the closure date, but it doesn’t always, so treat it as if it could end tomorrow.

1. Ask for the date and the method in writing. Exactly when does access end, and is the balance coming by draft, by cheque, or by transfer? Get it in an email or a letter, not over the phone.
2. Download twelve months of statements today. After closure, historical statements mean a written request, a per-statement fee and a wait. A mortgage lender, a landlord or an accountant will ask for them.
3. List every automatic payment. Read a full year of statements and mark every deposit and withdrawal you didn’t make by hand. This list is the whole job for the next two weeks.
4. Move the balance yourself while you still can. A draft in the mail can take weeks. An e-transfer or a transfer to another account you hold takes minutes, and you keep control of the timing.
5. Watch what’s still attached. A closed chequing account doesn’t cancel a loan, a card or a mortgage at the same bank, and it doesn’t erase what you owe. Ask which products are included in the closure and which aren’t.

Can you still open an account somewhere else?

Yes. This is the half of it the law actually protects, and it protects it firmly. The Bank Act requires a member bank to open a personal deposit account (opens in a new tab) for anyone who asks in person with acceptable ID, with no minimum deposit and no minimum balance. No job, nothing to put in that day, a bankruptcy behind you: none of those is a reason to refuse (opens in a new tab).

The ID you need

Two documents from a reliable source, one showing your name and address, the other your name and date of birth: government-issued ID, a recent tax assessment, a recent statement of government benefits, a recent Canadian utility bill, a recent bank or credit card statement, or a foreign passport. Originals, not photocopies.

There’s a second route if you only have one. A single document with your name and date of birth works when an existing customer in good standing, or someone of good standing in the community, confirms who you are.

What a bank can and can’t refuse you for

A refusal has to come to you in writing (opens in a new tab), together with the bank’s complaint procedure, OBSI’s contact information and the FCAC’s. A verbal “we can’t help you” at a counter isn’t that process working, and asking for the written statement is a reasonable thing to do standing right there.

The $4-a-month account

Every Canadian can get a bank account for $4 a month or less (opens in a new tab), with no minimum balance and at least 18 debit transactions a month included. The same account is free if you’re 18 or under, a student, a senior receiving the Guaranteed Income Supplement, an RDSP beneficiary, or a newcomer in your first year in Canada. You may also qualify if you’re Indigenous, receive the Disability Tax Credit, or receive social assistance from certain provincial programs.

One catch worth knowing before you spend a day on applications: banks that operate only online can require you to already hold an account somewhere else before they’ll open one for you. With nothing open at all, a branch or a credit union is the better first door. Our roundup of no-fee bank accounts in Canada covers what’s on offer once you’re back in.

How do you get your money and your payments moving again?

Redirect your income first, then your government payments, then your pre-authorized debits, in that order. Keep the old account funded right up to the closure date so nothing bounces on the way out, and expect the returned balance to take a few weeks if it comes by mail. Cash advance apps aren’t the bridge here, because they approve you on the direct deposits already landing in your account, and a new account doesn’t have that history yet.

Cashing a cheque when you have no account

If a Government of Canada payment arrives as a paper cheque during the gap, you can cash it free at any bank branch in Canada (opens in a new tab) that has tellers and disburses cash, even though you aren’t a customer. The cheque has to be $1,750 or less and not altered or counterfeit. The ID is easier than for opening an account: the two-document route works, but so does a single piece of government-issued photo ID carrying your signature. Government of Canada cheques never expire, so an old one still works.

Your pay, then your government payments

Employer payroll usually wants a void cheque or a direct deposit form and can take a full pay cycle to land, so it goes first. Tell payroll early, and ask them to confirm which cycle it starts on rather than assuming the next one.

Update CRA direct deposit (opens in a new tab) through your CRA account online or through your new bank, and it takes effect the next business day. You can’t do it by phone anymore, and the mail-in form can take three months or longer, so do it the same day the new account opens.

CPP, Old Age Security and Employment Insurance aren’t run by the CRA, and updating your CRA account doesn’t touch them. Those go through the Government of Canada direct deposit service or the program directly, which matters most to the people most likely to be caught out by a closure.

Everything else that pulls from the account

Pre-authorized debits cause most of the damage, and they need doing one at a time: loans and credit cards first, then insurance, then rent, then the subscriptions. Our guide to switching banks in Canada walks through the full order and the timing. The difference here is that you don’t get to keep both accounts running for two billing cycles, so leave a cushion in the old one until the day it shuts.

Can you appeal a closure, and what can the ombudsman do?

You can complain, and it’s worth it when the notice was short, but a complaint almost never reopens an account. Start inside the bank: once you complain in writing, it has 56 calendar days (opens in a new tab) to give you a detailed written response. From the day that response arrives you have 180 calendar days (opens in a new tab) to take it to OBSI. If the 56 days pass and nothing arrives, you can go to OBSI right away, and no clock has started running against you.

What a complaint realistically gets you

OBSI’s own position is that it can’t challenge or change a bank’s decision to end a relationship. Where it does find something, it’s about process rather than outcome: notice shorter than the agreement required, fees charged after closure, a payment that failed because the bank moved before its own deadline. Its recommendations aren’t binding, though a firm that refuses one gets publicly named. Its 2025 report also flags firms offering less than it recommends, which consumers accept because there’s nowhere else to go, so treat a settlement offer as a number you can question.

It’s also a busier office than it was. OBSI opened more than 6,100 investigations in 2025 (opens in a new tab), its first full year as the single external complaints body for every bank in Canada, and more than 1,300 complaints ended in compensation totalling roughly $5.8 million.

Once you’re banking again

Being cut off is a blunt lesson in how much rides on one account, and the fix is boring: a balance in the new one, built back up week by week. That part is easier when there’s something in it for you.

That’s what Lodavo is for. It’s free, and the more you save, the more tickets you hold in that week’s cash draw, where the top prize is $10,000 and at least $100 goes to a user every single week. Saving stops being a chore you’re behind on and turns into the thing with a prize attached.

Thirty days is enough time

A closure letter is a deadline, not a verdict on you. The 30 days are enough if you spend the first two of them on the list above, and the right to walk into another bank with two pieces of ID is real and enforceable. Start there, then rebuild the balance at your own pace.

Ready to make saving worth doing again? Download Lodavo free on the Apple App Store (opens in a new tab) or Google Play Store (opens in a new tab) and start earning tickets for the weekly draw.

Terms and conditions apply. No purchase necessary (alternate method of entry available). Skill-testing question required. Open to legal residents of Canada who are the age of majority. Odds depend on the number of eligible entries received. Full rules and odds at our contest rules.