Suppose you opened a bank account a few years ago. Maybe it was for a side business you no longer pursue or savings
you’ve set aside and nearly forgotten about. Months pass, and life moves on, with other accounts and cards becoming
your main focus. One day, you decide to access that old account, only to find it marked as a 'Dormant Account'.
Confused? You’re not alone. Dormant bank accounts are more common than you might think, especially when accounts go
unused for long stretches.
Define dormant account
A dormant account is a bank account that hasn't had any activity for a long time - for a year or more. 'Activity'
here refers to any transaction you do, like putting money in or taking it out. Banks label these accounts as
'dormant' to protect them. If you don't use an account for a long time, you might forget about it, exposing it to
unauthorised activities. By making it dormant, banks help keep your money safe.
How a dormant account works
Your Savings Account will become dormant if you don't use it for about 12 to 24 months. This does
not mean that you will lose your money or that the bank will close your account. The account is still there, but you
can't do some things anymore, like using online banking or withdrawing money from ATMs. The good part? Your money
still earns interest, just like it did before.
Also Read: 6 things to consider before opening a Savings Account
The escheatment process for dormant accounts
The government may receive the money from a bank account that remains dormant for a very long time. This process is
called the escheatment process. Here's what usually happens:
| Step |
Description |
| 1. Notification |
The bank will first try to contact you to inform you about the dormant status. |
| 2. Waiting period |
There's a waiting period (which can vary from state to state) to give you time to reactivate the
account. |
| 3. Last call |
If the bank doesn't hear back from you, they'll make one last attempt to reach out before the
escheatment process begins. |
| 4. Transfer of funds |
If there is no response, the treasury department will receive the funds from the account. |
| 5. Claiming funds |
You or your heirs can still claim the money from the government by providing the necessary proof of
ownership. |
Dormant account restrictions
An account that hasn't seen any activity for a while will receive a 'dormant' tag, essentially putting it on pause.
This means you can't use it for everyday things like online banking, making calls to the bank for transactions,
taking money out of an ATM, or writing cheques.
Axis Bank will alert you 3 months in advance if your account has seen no activity for some time and is on the verge
of becoming dormant. They'll send a letter to your residential address, an email or a text message. If you share the
account with someone else, they'll make sure everyone connected to the account gets the message.
Reactivating your dormant account
The Reserve Bank of India wants to make sure you can get your dormant account back up and running smoothly. Here's
what you need to do:
1. Write to the bank saying you want to reactivate your account. If you share the account with someone, you'll both
need to sign the letter.
2. Update your personal details with the bank. They'll want to see your PAN card, proof of residence, and other valid
IDs.
Also Read: Savings Account uses you might not know about
Conclusion
To wrap things up, Axis Bank not only simplifies the process of reactivating dormant accounts for its customers but
also offers a plethora of options catering to the diverse financial needs of individuals from various walks of life.
Remember, the key to avoiding the complexities of dormant accounts is simple: regular transactions.
Disclaimer: This article is for information purpose only. The views expressed in this article
are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd.
and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader
for taking any financial decisions based on the contents and information. Please consult your financial advisor
before making any financial decision
