Dormant bank accounts
Sometimes, current accounts that are left unused for extended periods of time are declared inactive or dormant by the banks.
Different banks have different policies about when an account is declared dormant.
We’ll help you work out what you should do if your bank account is declared dormant, including how you should go about reclaiming any funds that were left in there.
In This Guide:
- What happens when a bank account is declared dormant?
- Why could a bank account become dormant?
- How to stop your bank account from becoming dormant
- Recovering lost accounts
- Unclaimed funds
- Deceased relatives' accounts
What happens when a bank account is declared dormant?
When an account becomes dormant it is closed down and the money is moved to a central fund that is used to contribute to various good causes.
If you do decide to track down an account of yours that has become dormant, you will be able to reclaim any money that was left in it, though it is always advisable to do so as soon as possible. The longer you leave it, the more difficult it will be to track it down, though it won’t be impossible.
Ideally, you’ll want to get in touch with your bank before your account is declared dormant so that you can take the money out of it and close the account manually.
Why could a bank account become dormant?
If you have a bank account that you no longer use then it could be officially declared dormant after a set period of time.
This could be anywhere from a year to 15 years depending on the bank in question’s policy.
Common reasons for bank accounts to go dormant include moving house. If you’ve got several accounts open and you forget to change the address associated with them, there is a chance that that account will, after a certain amount of time, become officially dormant.
If any letters are returned to the bank declaring that you no longer live at that address, then they may declare the account dormant sooner.
How to stop your bank account from becoming dormant
Quite simply, the best way to prevent an account from being declared dormant is to either keep using it or to close it yourself manually.
‘Using’ here doesn’t necessarily mean making purchases – something as simple as a balance enquiry still counts as activity.
Banks are required to make efforts to track down the account holder before they declare the account dormant. You should note though, that if the account has a balance of under £25 then you might not be contacted before it is made officially dormant.
They’ll generally try to do this by sending a letter to the address associated with your account, so it’s important that you let your bank know when you move house otherwise you’re likely to miss the communication.
Recovering lost accounts
If you realise that an account of yours was declared dormant, no matter how long ago, you should first get in touch with your bank.
They will have the means to check your account’s status and track down your funds.
You can also make use of the service created by the British Banker’s Association (BBA), National Savings and Investments (NS&I) and the Building Societies Association (BSA) at https://www.mylostaccount.org.uk/.
The My Lost Account service will help you track down any of your bank accounts, dormant or active; you just need to provide them with the relevant personal information and they’ll get back to you within three months with the results of the search.
Once you’ve tracked down your dormant account, you will be entitled to recover any of the funds that were left in it, including any interest that you would’ve earned had the account remained active.
If, after 15 years of being the account being dormant, the money is still not claimed, then it can be transferred into what is known as the Reclaim Fund.
The Reclaim Fund was set up by Co-operative Financial Services and the money contained in it is passed on to the Big Lottery Fund, from which it is donated to various good causes and charities in the UK.
There is always a portion kept back in the Reclaim Fund so that if any customers do track down their dormant accounts, they’ll be able to recover the balance.
Deceased relatives' accounts
If a relative passes away, then you may be allowed to access their account to either close it or keep it active as you see fit.
You’ll just need to get in touch with your bank and provide them with proof of identity or other legal documents pertaining to the account.
The same applies if you believe a deceased relative has a bank account that has been left dormant.