Can a Bank Close Your Account for No Activity?

Dormant Accounts

• Each state publishes its own guidelines for determining how long an account must be inactive before the bank can consider it dormant. In most states, the bank can consider the account dormant if three to five years pass with no activity initiated by the account's owner. Once a bank account qualifies as dormant under state law, the bank must proceed according to the state's unclaimed property laws.
  
  

Escheatment

• When a bank holds a dormant account, the funds in the account will typically become property of the state through the process of escheating. However, before the bank can turn the funds over to the state, it must make one last attempt to locate the owner of the account. The bank may send letters to the account holder's last known address, or it may publish the account holder's name in the newspaper. If no one claims the account, the bank must transfer the funds to the state.
  
  

Lost Accounts

• If you discover records of a forgotten bank account in your name or in the name of a deceased relative, contact the bank to determine if the account has escheated to the state. If the bank informs you that the account has escheated, or if it has no record of the account, contact your state's department of unclaimed property to collect the funds.
  
  

Considerations

• The law requires a bank to attempt to locate the holder of an inactive account 30 days before escheating. However, most banks would rather keep the account than turn the funds over to the state, so they will typically make efforts to find account holders long before the accounts qualify as dormant under state law. Though a bank can't close an inactive account and keep the money, some banks may charge fees for accounts with no activity.