How to Keep Your Bank Account Active: Strategies to Avoid Dormancy

Many people wonder if their bank accounts will go dormant if they only deposit money infrequently. This article will explore what it means for a bank account to go dormant, provide strategies to maintain account activity, and clarify the rules governing account dormancy.

Understanding Dormant Accounts

Every bank has its own rules for account dormancy, but generally, an account will be considered dormant after 1-2 years of no activity. If an account remains dormant for 3-5 years, the bank will often turn it over to the state as abandoned property. This process typically involves recovering the funds, but without earning interest. Some banks may also charge fees on dormant accounts to recover some of the costs before turning the funds over.

Strategies to Maintain Activity

The easiest way to keep an account active is by performing a small transaction at least once a year. This can be as simple as transferring a dollar into the account and then transferring it back. This action indicates to the bank that the account is still active and not abandoned. Here are some detailed strategies:

1. Annual Transfer

Transfer a small amount of money into your account and then transfer it back out. This action meets the bank's requirement for activity without significantly impacting your finances.

Steps:

Transfer $1 into the account. Wait a day. Transfer $1 back out.

2. Monthly Withdrawal

Even a minimal monthly withdrawal can help keep an account active. If your account is a low-balance account, this may be necessary to avoid monthly fees.

Example: For a savings account, you may only need a $1 withdrawal to maintain activity. However, for a checking account, you may need to keep a balance high enough to avoid fees.

3. Deposits with Checks and Paychecks

Deposit checks and receive paychecks. Any transaction that involves a deposit is considered activity and will help keep the account from going dormant.

Example: If you receive a paycheck, deposit it into your account. Similarly, any deposits made with checks you receive will also help maintain activity.

4. Random Deposits for Withdrawals

Make random deposits followed by withdrawals. For instance, deposit a birthday check or a bank draft and then withdraw the money. This shows that the account is being used regularly.

Steps:

Deposit a check into the account. Smoothly withdraw the check amount.

Conclusion

As long as you have a balance in your account, it will remain there. Whether you make daily, weekly, or yearly deposits, the account's balance is secure. One transaction per month, even one per few months, is generally sufficient to keep the account active and prevent dormancy. If you follow these strategies, you can ensure your account stays active and avoid any potential issues.