# What Is a Dormant Account? Definition, Process & Examples

![Dormant Account](https://www.investopedia.com/thmb/FS4PaomEXGI80sFqFgBr1mybtrQ=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/dormant-account.asp-Final-db1a183794bb46c389282b9da88bef70.jpg)

*— Investopedia / Yurle Villegas*

## What Is a Dormant Account?

Dormant accounts are financial deposits with no recent activity, often forgotten by owners. They can become state-held property after a specific dormancy period but remain retrievable. Learn about the dormancy process and how you can reclaim your assets.

### Key Takeaways

*   A dormant account is an account that has shown no financial activity for a prolonged period, except for possible interest deposits.
*   Financial institutions are obligated to transfer dormant account funds to the state treasury after a specified dormancy period, which varies by state.
*   Owners can reclaim their unclaimed property from the state at any time, as states hold these funds indefinitely for safekeeping.
*   Actions like contacting a financial institution or transacting can prevent an account from becoming dormant.
*   Banks may charge fees on dormant accounts, which could eventually deplete the account balance if left unchecked.

## Understanding Dormant Accounts: Processes and Protocols

Accounts that can be declared dormant include checking and savings accounts, brokerage accounts, 401(k) accounts, and pension fund accounts. The contents of safety deposit boxes also may be declared unclaimed property.

An account can be declared dormant after as little as two years of inactivity.

An account becomes dormant if its owner does not initiate any activity for a specific period of time. An activity can include contacting a financial institution by phone or Internet, logging into the account, withdrawing or depositing money, or receiving a payment from a third party.

Interest or dividend payments that are posted automatically to checking, savings, or brokerage accounts are not considered to be activity.

### What If the Bank Fails?

If your bank fails, your account or safety deposit box will normally be held by the bank that took over the assets or by the FDIC. If the account was deemed inactive, it may be held by the state in which the account was opened. The FDIC has online resources for those who have deposits in institutions that have failed.

### Banks' Responsibilities: Attempting Contact with Dormant Account Holders

Some states require banks to contact dormant account owners using their latest mailing address.

If banks can't find the owner, the [dormant account assets](https://www.investopedia.com/how-to-check-forgotten-savings-accounts-11773938) become unclaimed property and go to the state treasury.

In California, for example, checking, savings, and brokerage accounts must show no activity for at least three years in order to become dormant. In the state of Delaware, there is a five-year dormancy period for the same types of accounts.

Dormant accounts usually have no [statute of limitations](https://www.investopedia.com/terms/s/statute-of-limitations.asp), so the owner or beneficiary can claim the funds anytime.

## Navigating the Escheatment Process for Dormant Accounts

Escheatment is the legal process for transferring unclaimed property to the state. Account owners can reclaim assets that were deemed inactive and transferred to the state.

States have enacted [escheatment](https://www.investopedia.com/terms/e/escheat.asp) statutes that govern the process of transferring unclaimed funds to the state and protect the unclaimed funds from reverting back to financial institutions.

State escheatment laws require companies to transfer unclaimed dormant account property to the state's general fund. The state handles record-keeping and returns lost property to owners or their heirs.

Owners can reclaim unclaimed property for free by applying with the state where the account was opened. Because the state keeps custody of the unclaimed property in perpetuity, owners can claim their property at any time.

Sometimes, the state may have sold property, such as stock shares. In that case, the cash value of the shares is paid out to the claimant.

## State-Specific Procedures for Reclaiming Dormant Account Assets

Every state has its own policies and processes for allowing people to reclaim assets from inactive accounts that have been turned over to the state.

California, for example, maintains a [searchable database](https://ucpi.sco.ca.gov/) that allows potential claimants to search by Social Security number. The State of Florida has a search function that it calls the "[Florida Treasure Hunt](https://fltreasurehunt.gov/)."

As that title implies, states are actually eager to return unclaimed property. After all, they have the recordkeeping responsibility but don't get to use the cash.  

## How Can I Claim My Money From a Dormant Account?

Your first step is to contact the bank or other financial institution where you had the account. You'll need proper identification and you should have some proof that it's your money, such as a bank statement.

If the bank has deemed the account inactive but has not yet transferred the money to the state, the account should be simply reactivated.

If the money is in the state's hands, you need to go to the state treasury department to get it back. The department should have a website devoted to claiming unclaimed property.

## I Think I Have Unclaimed Money Out There. What Do I Do?

The National Association of Unclaimed Property Administrators (NAUPA) has a [free search tool](https://unclaimed.org/search/) that can help you track down unclaimed property in all 50 states, some Canadian provinces, and other geographies worldwide like Puerto Rico and Kenya.

There are other commercial and governmental unclaimed property search services, online and off. However, note that NAUPA is a nonprofit association of state administrators who actually have custody of all that unclaimed money and want to return it to the rightful owners.

## Can I Close a Dormant Account?

You can [close a dormant account](https://www.investopedia.com/terms/c/closed-account.asp), and you should do so. Otherwise, the money will slowly get eaten away by fees, including dormant account fees.

To do this, contact the financial institution and ask it to transfer the remaining balance in the account to another current account.

## The Bottom Line

Keeping track of your bank accounts is crucial, especially when life's changes, like moving or changing jobs, can lead to forgotten assets. If an account becomes dormant, don't worry, your funds won’t vanish. Banks manage dormant accounts through a lawful process, transferring them to the state treasury as unclaimed property for safekeeping. The advantage is that you retain the right to claim your funds indefinitely. To retrieve your money, simply follow the state's process for reclaiming unclaimed property and provide the necessary identification and documentation.  

> **Article Sources**
>
> 1.  Federal Deposit Insurance Corp. "[Unclaimed Funds](https://closedbanks.fdic.gov/funds/)."
>     
> 2.  Federal Deposit Insurance Corp. "[Encheatment: Where Unclaimed Assets Go](https://www.fdic.gov/resources/consumers/consumer-news/2020-12.html)."
>     
> 3.  California State Controller. "[About Unclaimed Property](https://www.sco.ca.gov/upd_faq_about-unclaimed-property.html)."
>     
> 4.  Delaware Department of State. "[Abandoned or Unclaimed Property FAQs](https://vda.delaware.gov/abandoned-unclaimed-property-faqs/)."