Dormant Accounts: Don't Let Your Forgotten Funds Vanish
Ever found an old twenty-dollar bill in a forgotten jacket pocket? Feels pretty good, right? Now, imagine that feeling, but multiplied by, well, potentially hundreds or thousands of dollars, sitting in an old bank account you totally forgot about. Sounds great until you realize those forgotten funds could be shrinking due to fees or worse, gone for good. Welcome to the world of the dormant account, a common financial pitfall that sneaks up on more people than you’d think. As someone who’s spent years sifting through financial statements and advising folks on their money, I’ve seen this scenario play out countless times. It’s not just about losing a few bucks; it’s about losing control of your hard-earned cash.
So, what exactly makes an account “dormant”? It’s simpler than you might imagine. Essentially, it’s a bank or credit union account that hasn’t seen any activity for a set period, usually between one and five years. “Activity” here means more than just having money sitting there; it means you’re actively engaging with it. Think deposits, withdrawals, transfers or even logging into your online banking.
Why do accounts fall silent? Oh, the reasons are as varied as the people holding them. Sometimes it’s a forgotten savings account from childhood or a checking account opened for a specific, short-term purpose – like for college or a temporary job in another city – that was never properly closed. Moving residences, switching banks or even just consolidating finances can leave an old account in limbo. And honestly, who hasn’t misplaced an old passbook or forgotten about a small amount left over after closing out a life stage? It happens. But what seems like a harmless oversight can quickly turn into a headache.
This is where the real talk begins, because while your money is sleeping, your bank or credit union might be charging you for its slumber. It’s not out of malice, but a way to cover the administrative costs of maintaining these inactive accounts.
Let’s look at some real-world examples, fresh off the press. According to the fee schedule effective July 21st, 2025, Walled Lake Schools Federal Credit Union charges an “HR Dormant Account” fee of $5.00 per month (WLSFCU Fee Schedule). Imagine, that’s $60 a year just to have your money sit there, doing nothing! Similarly, Tampa Bay Federal Credit Union’s fee schedule, also effective July 21st, 2025, shows a “Monthly Fee for Share Account Access (if no checking account)” of $5.00 for ATM/Debit Cards, which, while not explicitly a “dormant” fee, highlights how fees can chip away at smaller, less active accounts (TBFCU Service Fees).
These aren’t just one-off charges. They accrue. Over time, a small balance can be completely eaten away. I’ve personally advised clients who were shocked to find a once-modest savings account had dwindled to zero. It’s a harsh reality check.
Now, what if your account stays dormant and those fees continue to chip away until nothing is left or if there’s a substantial amount, but no activity for a very, very long time? That’s when things get even more serious. The money might be “escheated” to the state. This legal process transfers abandoned property-including forgotten bank accounts-to the state’s unclaimed property division. The exact period before escheatment varies by state, but it’s typically after several years of dormancy.
When escheatment happens, financial institutions like Walled Lake Schools Federal Credit Union can charge a fee for this process too. Their current fee schedule, effective July 21st, 2025, lists “Escheatment of Account” at $50.00 (WLSFCU Fee Schedule). So, not only might your money be gone from your bank, but you might also be charged for the administrative effort of it leaving.
Once escheated, your money isn’t lost forever, but it becomes much harder to reclaim. You’ll have to go through your state’s unclaimed property division, which involves paperwork, proof of identity and potentially a long waiting period. I’ve heard stories of people finally getting their money back after years, but it’s rarely a smooth or quick process. It’s a hassle you definitely want to avoid.
So, you’ve discovered an old account that might be dormant. Don’t panic! Waking it up is usually straightforward, though it might cost you a small fee depending on how long it’s been closed. For example, Tampa Bay Federal Credit Union charges $25.00 to “Reopen member account closed in past 180 days” (TBFCU Service Fees).
Here’s the game plan:
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Contact Your Bank or Credit Union: This is step one. Call their customer service line or visit a local branch. Provide your full name, old address and any account numbers you might have. They’ll guide you through their specific reactivation process.
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Confirm Your Identity: Banks are, rightfully so, sticklers for security. You’ll likely need to provide identification like a driver’s license, social security number and perhaps even proof of your old address linked to the account. This is a good thing – it protects your money. Remember, as Timberland Bank wisely warns, legitimate banks will “never ask for your one-time passcode, password and/or card or account details” via text, email or unsolicited phone calls (Timberland Bank Home). Always be cautious of scams.
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Initiate a Transaction: Once your identity is verified, you’ll usually need to make a small deposit or withdrawal or transfer funds, to mark the account as active again.
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Update Your Information: Crucially, update your contact details – address, phone number and email. This ensures you receive future statements and important notifications, helping prevent future dormancy.
The best defense against dormant account woes is a good offense. Here are some simple, yet effective, strategies to keep your money wide awake:
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Consolidate Accounts: Do you really need five different checking accounts? Probably not. Consolidating your funds into fewer, active accounts makes them easier to manage and monitor.
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Regular Activity: Even a small, infrequent transaction – like setting up a recurring transfer of $1 from one of your active accounts to the dormant one – can keep it alive. Or, if you’re really trying to keep costs down, consider linking a small, secondary savings account to your main checking account and making tiny transfers every few months.
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Embrace Digital Tools: Most banks now offer fantastic digital tools that make monitoring accounts a breeze.
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Online Banking & Mobile Apps: Log in regularly, even if just to check your balance. This counts as activity.
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eStatements: Opt for electronic statements. This reduces paper clutter and ensures you’re reviewing your account activity regularly. West Gate Bank, for instance, offers eStatements and online banking which are perfect for this (West Gate Bank).
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Account Alerts: Set up alerts for low balances or inactivity. West Gate Bank provides “Account Alerts” that can notify you of various account activities, which is super helpful (West Gate Bank).
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Online Bill Pay or Zelle®: Using these services, like those offered by West Gate Bank, not only makes life easier but also ensures regular activity on your account (West Gate Bank).
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Keep Your Contact Information Current: This might sound obvious, but it’s astounding how many people move or change phone numbers without telling their bank. If a bank can’t reach you, they’re more likely to flag your account as inactive. This is where those “Account Verification Request” fees (like the $2.00 fee at WLSFCU) come in, because if they do need to verify your info and you haven’t proactively updated it, there’s a cost (WLSFCU Fee Schedule).
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Review Statements Regularly: Whether paper or electronic, actually read your statements. They are your primary source of truth about your account.
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Understand Fee Schedules: Before opening any new account, take a moment to understand its associated fees, including dormancy fees. These are typically available on the bank’s website, just like the comprehensive fee schedules from Walled Lake Schools Federal Credit Union (WLSFCU Fee Schedule) or Tampa Bay Federal Credit Union (TBFCU Service Fees).
Dormant accounts are more than just a nuisance; they’re a subtle drain on your financial well-being. By staying proactive, leveraging modern banking tools and understanding your bank’s policies, you can ensure your hard-earned money stays active, accessible and working for you. Don’t let your money disappear into the digital ether; keep it awake and in your control.
References
What is a dormant account?
A dormant account is one that hasn’t had any activity for a set period, usually between one and five years.
How can I reactivate my dormant account?
Contact your bank, confirm your identity and initiate a transaction to mark the account as active again.