In a process what is called “escheating” an account, banks are required to turn over funds from the inactive account to the state treasury. Once the account is sent to the state, the funds are held as unclaimed property.
This holds especially true if you're grappling with a limited income and find that your basic expenses eat up your monthly paycheck. But having $0 in savings puts you at risk of debt, credit score damage, and leaves you with no safety net. That's why it's important that you try to amass some cash reserves over time.
Any Account with zero balance, regardless of status, may automatically be closed by the Bank without notice.
If you haven't used your savings or current account for any transactions for over 1 year, the account becomes inactive. If the account has been inactive for 2 years, it becomes dormant or inoperative.
Generally, banks may close accounts, for any reason and without notice. Some reasons could include inactivity or low usage.
According to the RBI's norm, if a customer discontinues using his or her account for 12 consecutive months then banks will automatically make them inactive, and more than extra inactive 12 months will make it a dormant account.
If your account falls below the maintaining balance and has no client-initiated transaction for two years, it will incur a monthly dormancy charge of Php 30.
Closing a bank account is a straightforward process, but it can take an unexpectedly long time if you aren't prepared. Depending on a few different factors, the process can take a day, a week, or even a few months. In most cases, closing a bank account can be finalized in one or two days.
By the time you are 35, you should have at least 4X your annual expenses saved up. Alternatively, you should have at least 4X your annual expenses as your net worth. In other words, if you spend $60,000 a year to live at age 35, you should have at least $240,000 in savings or have at least a $240,000 net worth.
Is this legal? The truth is, banks have the right to take out money from one account to cover an unpaid balance or default from another account. This is only legal when a person possesses two or more different accounts with the same bank.
Fast answer: A general rule of thumb is to have one times your annual income saved by age 30, three times by 40, and so on.
People having their savings accounts in various banks have to maintain a certain sum of money in their bank accounts. When this account balance falls below the required threshold amount, the bank levies a penalty on the account holder for failing to meet the requirements.
If you don't pay your negative bank balance, the bank will close the account after some time and report to the credit agencies. This will be included in your credit report as unpaid debts and will affect your credit score. Also, you will not be allowed to open another account with the bank.
You need not worry. Your money can be recovered. As per RBI guidelines, a savings or current account becomes 'inoperative' without transactions for two years.
View the applicable BPI Debit Card Fees here. (If account is still at zero balance after 7 days, the account will be automatically closed.)
To check if your account is still active, please try to access it at any BPI ATM or call our 24-hour hotline, 89-100.
You can reactivate your inactive bank account by simply making a deposit or withdrawal transaction. To reactivate your dormant account, visit your home branch and provide a written request for reactivation of your account.
Zero Balance Savings Account is a type of account where you are not required to have a minimum balance. A majority of banks in India keep a limit of Rs 10,000 per account to maintain the account. Note that banks themselves will not offer a zero balance account, rather customers are required to ask the banks for it.
Other benefits The holders of a zero-balance account can get access to a debit card as well as ATM. They can also choose to opt for mobile and/or net banking. Apart from these, the safe deposit locker facility is also provided. The charges collected for these facilities are nominal.
Benefits of zero balance accounts:
No ATM/debit card charges. Free net banking. Complimentary passbook and checkbook is issued as part of the welcome kit, at the time of opening the account. Special privileges and offers for salary account holders based on the category of company/institution.
In most cases, the easiest way to determine whether an account is still active is to try to log in to the bank's website or to use an ATM card to check a balance.
The good news is, closing your account usually comes at no cost. Not only do most banks not charge a fee to close a basic savings account, but doing so will not affect your credit rating. If, however, your account has a negative balance, you will need to repay that at the time of closing.
Your financial institution might close your account if you have excessive overdraft fees or you've had a continuous negative balance; if you frequently have more transactions in your savings account than are allowed per statement cycle; or if your paper checks are lost or stolen, for example.