What is a dormant bank account?

What is a dormant bank account?

If you have a bank account that has become dormant, our guide will cover what this means for your money and what you should do next.

What is a dormant bank account?

A dormant bank account is an account that has been inactive for a number of years. The bank or building society may contact you over that time to encourage you to use the account, before classing it as dormant.

What is a dormant bank account?

A dormant bank account is an account that has been inactive for a number of years. The bank or building society may contact you over that time to encourage you to use the account, before classing it as dormant.

How long before an account becomes dormant?

The time it takes for an account to become dormant can vary depending on the provider, and also whether it is a current or savings account. A current account can be made dormant with up to as little as 12 months of inactivity. Whereas, a savings account can take three to 15 years.

There are a number of reasons why an account can be left to become dormant. For example:

  • A savings account could have been opened for a child. That child is now an adult and is unaware of the money or the details are still with the person who opened it for them.
  • The account holder has multiple current accounts and has simply forgotten about it. Particularly if they have moved home without updating their address details and any correspondence is being sent to their old address and being returned unopened.
  • It is an old account that is no longer needed and instead of being closed, it is left unused.

Why is an account made dormant?

An account is made dormant by the bank or building society for security reasons. If your mail fails to reach you and is repeatedly returned to the sender, and the provider can’t get hold of you via phone or email, then it will be made dormant.

This is done to protect you from identity fraud. If the bank continued to mail any correspondence to the incorrect address and your mail ended up in the wrong hands, then they will have access to your sensitive details. However, if the account is dormant, they won’t be able to access your money.

What happens to a dormant bank account?

If an account has been made dormant, it is essentially blocked. You will no longer be able to use the card, including at the ATM, no more new debit cards or chequebooks will be sent to you, and your internet banking will be frozen.

The only way to continue to use the account would be to contact the provider to reactivate it.

What to do if you have a dormant account

If your account is dormant for more than 15 years, with no attempt to reclaim your money, then the bank can transfer the money to an independent body called ‘Reclaim Fund’ via the ‘Dormant account scheme’. This will then send your money to a good cause.

However, you can still reclaim your funds even after your money has been transferred to the Reclaim Fund.

1. Reclaim your funds

To reclaim your funds, including any interest earned whilst the account has been dormant, all you need to do is contact your bank or provider. You’ll be asked to provide information about the account to verify you are who you say you are, including:

  • The account number
  • Name of the account holder
  • The account balance
  • A statement

Depending on how much information you can provide, it can take up to three months for the bank to locate your funds.

Alternatively, if you don’t have all the details you need or if you’re not sure if you have a dormant account or not, you can use the free service My Lost Account to track down any dormant accounts you may have.

2. Reclaim funds from family members

If a family member has passed away and they had funds in a dormant account, as long as you are entitled to them, you can claim the money. You will need to provide proof of your identity and your rights to the money before the bank will release the funds to you.

3. Reactivate or close your account

If your account is inactive, but not yet classed as dormant, then all you will need to do is use it to take it out of the inactivity stage. However, if it is already dormant, you will need to contact your provider. You will have to provide as much information as you can to verify your identity before it will be reactivated. The same goes if you wish to close a dormant account.

How to avoid your account becoming dormant

To avoid your account becoming dormant, all you need to do is use it. This can include anything as simple as checking the balance or withdrawing cash every so often.

With the thinkmoney app, you can make the most of your account and always have access to it to prevent it from becoming dormant. With a click of a button you can easily: