How long does a bank account stay active if not used?

Inactivity and Bank Account Dormancy

Bank accounts can become dormant if they remain inactive for an extended period. The definition of inactivity varies among financial institutions, but generally, it refers to the absence of any transactions or account maintenance activities.

Dormancy Period

In the United States, the Uniform Dormant Bank Accounts Act establishes a default dormancy period of seven years. This means that if an account has no activity for seven consecutive years, it is considered dormant. However, individual states may have their own specific dormancy laws that override this federal provision.

Unclaimed Property

After an account has been dormant for the specified period, the funds may be transferred to the unclaimed property division of the state where the bank is located. Each state has its own laws regarding unclaimed property, including timelines for filing claims and potential escheatment of funds to the state.

Consequences of Dormancy

Dormant bank accounts may face certain consequences, such as:

• Fees: Some banks may charge monthly or annual maintenance fees on dormant accounts.
• Escheatment: In some states, dormant accounts with insufficient funds to cover fees may be escheated to the state.
• Loss of access: Dormant accounts may be locked or closed, making it difficult for account holders to access their funds.

Preventing Dormancy

To prevent an account from becoming dormant, it’s important to maintain minimal contact with it. This can include:

• Making regular transactions: Even a small deposit or withdrawal can reset the dormancy clock.
• Using online banking: Accessing your account online and performing any type of transaction will keep it active.
• Setting up automatic transfers: Automated deposits or payments will count as account activity.
• Contacting the bank: If you won’t be able to make transactions for an extended period, contact your bank to inquire about their dormancy policy and any options to keep your account active.

Conclusion

Understanding the concept of bank account dormancy is crucial to avoid losing access to your funds. By maintaining regular activity or taking proactive measures, you can keep your account active and prevent it from falling into a dormant state. If your account has become dormant, it’s important to contact the bank or the state’s unclaimed property division to inquire about your options for recovering your funds.