What Happens to Inactive Bank Accounts


Updated on Wed Sep 24, 2014

Having a bank account go dormant may commonly be thought of as a rare occurrence but it actually happens to many banking customers.

Some tend to forget about them. Others simply don’t use them on a regular basis. Often, a family member dies and passes down a bank account without the heir knowing it.

Whatever the reason may be for an account to fall dormant, nobody wants to see their money disappear. While the money still technically belongs to the customer, it becomes a hassle to get the money back from the state (where inactive account balances are sent to).

Where Does the Money Go?

Here’s a typical outline of what happens to a dormant bank account:

1. The account is dormant for a specific period of time.

Generally, a time frame of three to five years with no customer-initiated activity sends an account into dormancy. The amount of time that must lapse depends on the state in which the bank account was opened.

2. An attempt is made to contact the account holder.

Prior to sending the account to the state, the bank must try to notify the account holder. If the customer does not respond within a certain amount of time, the balance on the account will be turned over to the state.

3. The bank turns the account over to the state.

In a process what is called “escheating” an account, banks are required to turn over funds of the inactive account to the state treasury. Once the account is sent to the state, the funds are held as unclaimed property.

To reclaim your money, you will have to contact your state for the instructions on how to get your money back. You’ll need to complete and submit a claim form along with the necessary identification. If you happen to have unclaimed property held by the state, you can begin the retrieval process by visiting www.unclaimed.org.

How to Avoid Letting Your Accounts Go Dormant

1. Review your bank accounts regularly.

By doing this, you can identify which accounts to close to becoming officially inactive. Shift the funds to another account to make it less of a worry. To make this easier, use money management software.

2. Create account activity with automatic transfers and scheduled payments.

With automated transactions, keeping your account active should not be a problem. You can set up an automatic transfer of a small amount into your savings account or make monthly bill payments from your checking account.

3. Keep your address and contact information updated on your bank accounts.

If you keep your address up-to-date, you’ll be less likely to miss the final notification before an account is turned over to the state. If you allow the state to escheat an account, it could take months or even years to reclaim your funds.


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  • Mike in Louisville, KY

    My checking account balance of $43.75 with PNC Bank was turned over to the State without notifying me in any way. When I called customer service, they said they did not have to notify me if the amount is less than $100.00. I know this isn’t much money to many folks, but it was my little nesr egg. The State informed me that I would have to wait three months for the money to show up in their system, then I will have to request forms to fill out and return only to wait another three months for processing before a check could be written.


    how to screw the customer;..let me count the ways!