Some banks publish the names of the account holder in a local newspaper. If your current/savings account does not witness any transaction over a period of 12 months, it gets classified as inactive account. ... Before sending the account balance to the state, the bank is usually required to try to contact the customer. Considering the fact that different banks have their own rules and regulations, but route to close the account is mostly the same. Opening, Closing & Inactive Bank Accounts; Inactive Accounts; Share This Page: Glossary. After a period of time, they’re required to turn it over to the state. Most state governments require banks to complete annual reports that contain details of inactive or dormant bank accounts. The bank may be trying to alert you that your account is inactive. If the account remains inactive, it may be classified as abandoned, and your funds may be turned over to the state. Choose accounts without inactivity fees, especially for longer-term accounts, such as retirement accounts. The good news about escheatment is that the government doesn’t take the money and spend it as it pleases. Find out what the rules are about inactive accounts at your bank. When this happens, the host bank will usually begin charging a monthly fee. If your account remains inactive for too long and the bank can’t get in contact with you, the government considers it to be abandoned and takes possession. Depending on the balance in the dormant account, the remaining funds could all end up going to pay fees. If no action is taken, the account is then placed in dormant status. As per paragraph 24.2 (ix) of the Master Circular no 59/2015-16 on ‘Customer Services in Banks’ dated 01 July, 2015, a savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years.The accounts which have not been … Keep your accounts active. Why bank accounts become inactive/dormant? Why would a bank send me a notice stating that my account may be turned over to the state treasurer as abandoned property? If you have a current or a savings bank account and have not done any transactions through it for more than 12 months, then it will be classified as an inactive account. INACTIVE AND DORMANT ACCOUNT . Keep accurate financial records. More than half of unclaimed accounts are dormant savings accounts — accounts that have had no activity for three years. Most banks can provide you with a copy of your account agreement and rules if you request one. This practice may also be referred to as Some banks send a letter to the last known address of the account holder. What is meant by inoperative or Dormant Bank Account? 4. Rules vary from state to state, but in many places an account becomes dormant if the owner does not transact on it for six months or more. This is called escheatment. Make a small deposit or withdrawal every year. Cash all checks promptly for utility deposits, dividends, insurance premiums, wages and any other refunds you received. When money lies dormant in a deposit account or appears to be abandoned, the bank or other organizations with which the money was deposited aren’t necessarily allowed to just keep that money for their own use. Is taken, the host bank will usually begin charging a monthly fee three. Host bank will usually begin inactive bank account rules a monthly fee remaining funds could end... Up going to pay fees they ’ re required to try to the... 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