Dormant bank accounts have had no activity for a certain period of time, typically three to five years. That means no deposits, withdrawals, transfers, or other processes.
Do all banks have to stipulate the same time period for classification of an account as dormant? Yes, because RBI has stipulated that a savings / current account will be classified as dormant / inoperative if there are no transactions in the account for over a period of two years.
If you ignore your savings bank account and let it become dormant, you'll face limitations. You won't be able to write checks, renew your ATM/debit card, change your address on file, or perform any transactions through ATM, internet banking , or phone banking.
Inactive Accounts
Generally, an account is considered abandoned or unclaimed when there is no customer-initiated activity or contact for a period of three to five years.
However, long periods of inactivity often cause accounts to be marked as dormant. The amount of time varies depending on the bank and the product. In general, current accounts are deemed 'lost' after about 12 months of no use, while savings accounts can be left for three to five years before the bank takes action.
When an account becomes dormant, it remains open but inactive, and the account holder cannot use certain features like online banking or ATM withdrawals. Banks may have policies to handle dormant accounts, such as charging fees, restricting access, or transferring funds to a separate account.
Once submitted, the bank will inform you via SMS and email that your account is active again based on the KYC documents provided. There are no fees for reactivating dormant accounts, and banks cannot impose penalties for not maintaining minimum balances in such accounts.
While a dormant account does not directly affect your credit score, the ancillary effects of not addressing one can be significant. Closing credit card accounts can alter your credit utilization ratio, an important factor in scoring models.
A bank account is considered dormant when there is no financial activity—deposit or withdrawal—for a period of two years for a savings account and one year for a checking account.
Financial institutions are required to transfer the money held in dormant accounts to the state's treasury after the accounts have been dormant for a certain period of time. The amount of time varies by state.
The Savings Account becomes Inactive or Dormant
For instance, if you haven't carried out any transaction through your Savings Account for more than a year, then it is classified as "Inactive." Similarly, if you do not transact using your Savings Account for more than 24 months, it is classified as a Dormant Account.
Dormant accounts pose a significant security risk. The Cybersecurity and Infrastructure Security Agency (CISA) recently highlighted that attackers are now targeting these accounts as an initial entry point into organizational environments.
Bank accounts become inoperative (or dormant), if they remain unused over a period of time. As per RBI guidelines, a savings/current account will be inoperative if there are no transactions in the account for over a period of two years.
If you have any paperwork from your lost account, such as a letter or email, this should include details about the account in question, such as an account number. You can then contact the provider and it will talk you through how to reactivate the account or access the money in it.
The financial institution begins charging an inactivity fee.
Some banks charge zero, but others slap on fees of $5 to $15 per month. Look for these fees on your monthly bank statement, or on your bank's app.
We take part in the Dormant Accounts Scheme, established under the Dormant Bank and Building Societies Act 2008. If your account is in credit and has been dormant for 15 years or more, we may transfer the balance to Reclaim Fund Limited (RFL).
If you don't use a credit card for a year or more, the issuer may decide to close the account. In fact, inactivity is one of the most common reasons for account cancellations. When your account is idle, the card issuer makes no money from transaction fees paid by merchants or from interest if you carry a balance.
To reactivate your dormant account online, you will need to submit an activation request to the bank via email or your bank's digital channels, such as internet banking and mobile apps. Alternatively, you can also visit your bank's nearest branch.
A bank may decide to close your savings or checking account under any of the following circumstances: Your account has been inactive for a long time. According to the Office of the Comptroller, financial institutions might consider a bank account abandoned if it hasn't been used for three to five years.
Can I withdraw cash from an ATM if my account is dormant? No, dormant account holders will not be able to make ATM transactions. Do banks levy any charges for the activation of an inactive account? No, banks do not levy any charges for the activation of an inactive account.
Aadhaar Card, • Driving License • Passport • Voter's Identity Card issued by the Election Commission of India • Job Card issued by NREGA signed by a State Government official. letter issued by the National Population Register containing details of name and address.
If a bank account hasn't been used for two years, it becomes dormant. The owner of a dormant bank account cannot use services associated with the bank. Usually, the dormant bank account gets activated in a day.
A company is called 'dormant' by Companies House if it has had no 'significant accounting transactions' during the accounting period. A significant accounting transaction is one which the company should enter in its accounting records. Significant transactions don't include: filing fees paid to Companies House.
Are there any charges for making a dormant account operative? No charges will be levied for making an inoperative account active. Banks are also not permitted to levy penal charges for non-maintenance of minimum balances in an inoperative account.