By: Money Navigator Research Team
Last Reviewed: 16/01/2026
FACT CHECKED
Quick Summary
Banks can only return a “remaining balance” once the account’s position is final (including any pending transactions, reversals, fees, or settlement adjustments).
If closure happens via the Current Account Switch Service, the balance is transferred on the agreed switch date; otherwise, timing depends on how the bank returns funds (transfer vs cheque) and whether anything is still settling or under review.
This article is educational and not financial advice.
What counts as a “remaining balance” after closure?
A “remaining balance” is the credit left over once the account has effectively finished processing what it needs to process. That sounds simple, but the number shown on-screen before closure isn’t always the final figure the bank can release.
Common reasons the “final” amount differs from the “visible” amount include card transactions that were authorised earlier and settle later, reversals, refunds landing after closure, and charges or interest applied after closure where terms allow.
Some banks explicitly flag that charges, interest, or card transactions can still be paid after the account is closed, which affects the final position.
If you’re dealing with a restriction rather than a closure, the mechanics and timelines can be different – see the guide on the difference between a frozen and a closed business bank account.
Typical timing: three common closure routes
1) Closure as part of a full switch (Current Account Switch Service)
If you close your old account as part of a full switch, the switching scheme states you can access funds in the old account up to the switch date, when they’re transferred to the new account. The scheme is designed to complete within seven working days, and includes payment redirection for a minimum period.
Scheme overview: Pay.UK’s Current Account Switch Service page
Timing of the balance transfer: CASS common questions on when the old balance transfers
Practical impact: where switching is used and completes normally, the “how long” question is often answered by “on the switch date”, because that’s when the balance transfer is designed to happen.
2) Manual closure with a nominated account for the return
Many banks return any remaining credit by transferring it to another account you specify. For example, Santander describes returning the balance either by transfer to another account or by cheque to the registered address. Santander’s account closure guidance
Practical impact: the fastest outcomes tend to happen when the bank has clear destination details and there’s nothing left settling that might change the final figure.
3) Manual closure where the bank issues a cheque instead
Where a cheque is used to return funds, the overall “time to usable money” is usually the time for the cheque to arrive plus the time for it to clear after being paid in.
NatWest explains the Image Clearing Scheme cycle and that, in many cases, funds can be available one working day after paying in (subject to the clearing cycle and circumstances). NatWest guidance on cheque clearing timeframes
Practical impact: even if the bank issues the cheque promptly, there can still be a lag before the funds are treated as cleared in the receiving account.
Why a “simple” return can take longer
Pending card transactions and settlement timing
Card payments can have a gap between authorisation and settlement. If settlement hasn’t completed, the bank may not treat the position as final. Some banks explicitly note that card transactions can still be paid after closure, which means the account can still move after the “close” instruction is given. HSBC’s guidance on closing an account and post-closure charges/transactions
If card disputes are in play, timelines can extend because disputes and reversals can change what the bank must hold or release. For related context, see card disputes in administration or liquidation and chargebacks when a business account is frozen.
Fees, interest, and end-of-cycle adjustments
Closure doesn’t always prevent final fees or interest calculations that are contractually due. If those are applied after the closure request, the “remaining balance” can be reduced before it’s returned. This is especially relevant where the account has activity-based charges – see what fees business bank accounts charge.
Identity checks, destination-details issues, and “release vs hold” decisions
Banks may need to confirm where funds should be sent and whether they can be released immediately. The Financial Ombudsman Service notes that, when it looks at account-closure complaints, it may consider evidence showing whether funds have been held or released (including salary/benefit payments). Financial Ombudsman Service guidance on bank account closures
Business-account closure steps can be more involved
Depending on provider and account type, business closure can involve additional process steps (for example, where a relationship manager is involved or where there are multiple account holders/signatories).
NatWest International, for instance, indicates business customers may be directed to speak to a relationship manager, and it also states it aims to close accounts within a stated timeframe and that closure can be quicker if the remaining credit balance is transferred out first. NatWest International account closure guidance
Summary table
| Scenario | Outcome | Practical impact |
|---|---|---|
| Full switch using the switching service | Balance transfers on the switch date | Often the quickest route to a defined “transfer date” if the switch completes normally |
| Manual closure + bank transfer to a nominated account | Bank returns credit by transfer once the position is final | Speed depends on whether anything is still pending/settling |
| Manual closure + cheque issued | Credit returned by cheque | “Usable funds” depends on delivery plus cheque clearing cycle |
| Pending card settlement or reversals | Final balance can change after closure instruction | Bank may wait to avoid overpaying then needing recovery |
| Open disputes/chargebacks/refunds after closure | Adjustments may be netted against the final credit | Remaining balance may be held until adjustments are resolved |
| Closure linked to review or restricted access | Funds may be held while decisions are evidenced/processed | Timeframes become less predictable and documentation-heavy |
Scenario / Process / Outcome
| Level | What’s happening | What it changes for timing |
|---|---|---|
| Scenario-level | How the account is closing (switch vs manual), whether the account is under review, and whether there are disputes/pending items | Determines whether there’s a fixed “transfer date” or an open-ended “once finalised” position |
| Process-level | Settlement cycles, end-of-cycle fees/interest, verification of destination details, and operational closure steps | Adds “waiting time” even after the closure request is accepted |
| Outcome-level | Method of return (transfer vs cheque) and when funds become cleared/usable in the receiving account | The “returned” moment and the “usable” moment may be different dates |
Where FSCS cover and “bank failure” fits in (and where it doesn’t)
Account closure itself does not automatically change whether funds are eligible for FSCS cover; FSCS cover depends on the type of firm and product. If you’re looking at eligibility and limits in general terms, see is money in a business bank account protected by the FSCS?.
Separately, rules about how payment-service contracts are terminated (including notice and reason-giving requirements in many cases) have been subject to change proposals and implementation timelines, which can affect how closures are communicated – see the UK Government impact assessment on contract termination changes. These are about termination conduct and notice, not a guaranteed “payout by X date”.
Compare Business Bank Accounts
Different business accounts can have different closure mechanics (for example, the closure channel, how balances are returned, and how multi-user permissions work), which can affect how quickly a closure can be completed in practice.
To compare account types and providers side-by-side (fees, features, eligibility, and typical setup), see our hub: Business bank accounts.
Frequently Asked Questions
Sometimes it can be, but it depends on whether the account’s balance is final and the return method is straightforward. Where the return is a transfer to a nominated account and there are no unsettled items, the “return” can be relatively quick.
If there are pending items that can still change the final figure (for example, card settlement, reversals, or post-closure charges where terms allow), the bank may treat the balance as provisional until those items settle.
Pending or recently authorised card payments can settle later, which can change the final amount available to return. Some banks explicitly explain that card transactions can still be paid after closure, which implies the account can still move after the closure instruction is made.
In practical terms, this is one of the most common reasons a “remaining balance” is not immediately released: the bank may wait until it can determine the final net position.
Refunds can still be initiated after closure because merchants and card schemes may process them on a different timetable from the closure event. How those refunds are handled depends on the provider and the rails involved.
Where a switching service is used, scheme materials describe how redirected payments and certain post-switch refunds are handled between the old and new provider, but timing is still bounded by the underlying payment process and not purely by the closure date.
They can, where the contract allows charges or interest to be applied after the closure request (for example, charges connected to transactions that complete after the closure instruction). That can reduce the final net credit that is returned.
This is one reason the “headline balance” seen before closure may not match the “remaining balance” that is ultimately returned once all adjustments have been applied.
A cheque return usually creates two time components:
- (1) when the cheque is issued and received, and
- (2) when the cheque becomes cleared funds after being paid into another account.
UK cheque processing operates under the Image Clearing Scheme with a defined clearing cycle; the practical effect is that “received” and “cleared” are not always the same day.
Some banks return balances by cheque where a transfer destination isn’t available or can’t be used for operational reasons. Santander, for example, describes returning balances either by transfer to another account or by cheque.
Where neither route is workable immediately (for example, due to missing or outdated contact details), funds may remain in an internal holding arrangement until the provider can complete the return process.
In some closure scenarios, funds may be held while the bank completes steps it considers necessary (for example, to evidence a decision, process disputes, or comply with obligations).
The Financial Ombudsman Service notes that, in closure complaints, it may consider evidence about whether funds have been held or released.
“Held” does not automatically mean “lost”, but it can extend the time between closure and the point at which funds are actually returned.
Using the switching service can create a defined “switch date” for when the balance transfer is meant to occur, and the scheme is designed around a seven-working-day switching timetable with payment redirection.
However, the switch date doesn’t change underlying settlement rules for every possible payment type; it mainly governs the switching and redirection process between providers.
Account opening times vary by provider and by what checks are required. Some applications complete quickly; others take longer due to verification, documentation, or risk checks.
For context on realistic timing drivers, see how long it takes to open a business bank account and why business bank account applications get delayed.
In insolvency, control and authority over the account can change, and payment flows can be affected by how the insolvency process is being run and what the bank requires to action instructions. That can alter how quickly balances can be moved or returned.
Separately, card disputes can continue to arise around insolvency events, and dispute outcomes can affect the net position the bank treats as final. For related context, see what happens to card disputes in administration or liquidation.
The key hidden mechanism is finality. A bank can close an account relationship on a given date, but the account’s “final” balance is only truly final once all the moving parts that can legally and operationally change it have finished changing it – settlement, reversals, disputes, and contractually due charges.
That’s why two businesses can both have an account “closed” on the same day and see very different outcomes for when they receive the remaining balance: the closure date is a milestone, while balance release is an outcome that depends on finality plus the chosen return method.
Sources & References
Financial Ombudsman Service guidance on bank account closures
Santander guidance on closing an account and returning the balance
HSBC guidance on closing an account, closure times, and post-closure charges
NatWest International guidance on closing your account and transferring remaining balances
NatWest explanation of cheque clearing timeframes (Image Clearing Scheme)
UK Government impact assessment on payment services contract termination changes