With how busy most of our daily lives are we tend to forget about things, even very important things like a savings account. When this happens over a matter of years, that account becomes classified as a dormant. We will be digging a little deeper into understanding what a dormant account is, how it can impact you and how you can reactivate it.
As technology improves and makes our lives easier, it seems to make us busier and sometimes even forgetful. I am guilty of this myself. This leads me to the topic – dormant accounts. I’ll give you my real life scenario to breakdown the meaning.
I made an account at a credit union a few years back. I was using the credit union as a way to save money (by having money taken directly from my paycheck and deposited into this account). It worked out nicely while I was working for the same company, but eventually I moved from Southern California to the Bay Area. This lead to a new job and now I was no where near the small regional credit union I had the account with. And so, the out of sight out of mind thing kicked in.
I slowly used up pretty much all the money in my savings account and then just left it. After two years of ZERO activity in my account it officially went dormant. One key thing to remember is that an account will become dormant after 2 years of non-activity.
You still may collect some interest, but it might be incredibly small, and this does not count as ‘activity.’
How does this impact me?
Having a dormant account can have a neutral or negative impact on you.
The neutral impact is..well neutral. You may get letters in the mail or emails from the bank or credit union letting you know your monthly statement is available (I still get emails). You aren’t getting charged any yearly fees for having this account. It basically is just sitting there doing nothing.
This one is a bit more critical to your wallet. Some banks or credit unions charge a yearly free for having a savings account with them. If your account was low when you left it, there is possibility that you might owe the institution some money for your dormant account. If you have one, now might be a good time to check on that and close it out.
This is where you tell me, “well you have one too Ryan, why don’t you take your own advice?”
You are right! I am going to look into mine as soon as I finish this up and close it out in hopes that I don’t owe my tiny credit union any extra dough.
What if I want it back
Perhaps after you read this, I have lit a spark in your memory and you remember you have a dormant account and want to kick start that baby up and get it going again. Super!
Call up the bank or credit union where your account is at and take the necessary actions to get that account up and running again. I imagine it shouldn’t be too hard. You’ll just need to go through some of the necessary verification processes.
In the end
Dormant accounts aren’t the end of the world, but have the potential to hurt your cash flow. Pay attention to any emails or letters you get from any of your financial institutions. They are obligated to let you know about what is happening with your account. I am guilty of ignoring the ones I get from my credit union and I am going to change that today.
Try and remember where you have accounts and if you aren’t using them on a regular basis, close them out!
Did this post make you think about if you have a dormant account or not? Have you had any issues with one? Positive, neutral or negative? Sound off in the comments.