Removing the Mystery Surrounding Dormant Bank Accounts
Having a bank account become dormant is not something that is planned. Usually it takes customers by surprise and often they are not even clear how the account became dormant. In extreme circumstances, they even forget they had the account.
A bank considers an account dormant when no transactions have occurred within a specified period of time – usually 1-2 years. When this occurs, a notification is mailed to the account holder informing him/her of the dormant status. At this point, the customer has a few options. If the customer wishes to keep the account open, they can either notify the bank or initiate an account transaction. Every bank is different, but these are the two most common scenarios. If no action is taken, the account is then placed in dormant status. When this happens, the host bank will usually begin charging a monthly fee. Depending on the balance in the dormant account, the remaining funds could all end up going to pay fees.
In Pennsylvania, state regulations require banks to move accounts from dormant to abandoned status after three years of inactivity and escheat (turnover) abandoned account balances. This ensures that property always has a recognized owner. The State holds the funds until the owner can be found. Banks will attempt to contact dormant account holders in order to avoid escheatment.
So what can you do to avoid a dormant or abandoned account label? Take a proactive approach in reviewing all of your account relationships. If you keep a low balance and use the account infrequently, it may make sense to close it. This could save you the expense of fees and frustration of going through the State’s process for unclaimed property.
Have questions about a possibly dormant or abandoned account? Call us at (877) 773-6605 for more information. If you believe you have unclaimed property that was escheated, please contact the PA State Treasury.