Choose accounts without inactivity fees, especially for longer-term accounts, such as retirement accounts. What is meant by inoperative or Dormant Bank Account? Most banks can provide you with a copy of your account agreement and rules if you request one. Most state governments require banks to complete annual reports that contain details of inactive or dormant bank accounts. Considering the fact that different banks have their own rules and regulations, but route to close the account is mostly the same. 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. Keep your accounts active. The bank may be trying to alert you that your account is inactive. 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 … If the account remains inactive, it may be classified as abandoned, and your funds may be turned over to the state. Find out what the rules are about inactive accounts at your bank. This is called escheatment. ... Before sending the account balance to the state, the bank is usually required to try to contact the customer. Some banks send a letter to the last known address of the account holder. Cash all checks promptly for utility deposits, dividends, insurance premiums, wages and any other refunds you received. The good news about escheatment is that the government doesn’t take the money and spend it as it pleases. When this happens, the host bank will usually begin charging a monthly fee. Why bank accounts become inactive/dormant? If no action is taken, the account is then placed in dormant status. Opening, Closing & Inactive Bank Accounts; Inactive Accounts; Share This Page: Glossary. If your current/savings account does not witness any transaction over a period of 12 months, it gets classified as inactive account. After a period of time, they’re required to turn it over to the state. INACTIVE AND DORMANT ACCOUNT . This practice may also be referred to as Depending on the balance in the dormant account, the remaining funds could all end up going to pay fees. 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. 4. Some banks publish the names of the account holder in a local newspaper. 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