Dormant Account

DEFINITION of 'Dormant Account'

When there has been no financial activity for a long period of time, other than posting of interest, an account can be classified as dormant. Statute of limitations usually does not apply to dormant accounts, and funds can be claimed by the owner or beneficiary at any time. Many banks have accounts that have been left dormant for years because the account holders have forgotten about them.

BREAKING DOWN 'Dormant Account'

Reversion of a property or monies is transferred to the State if the owner dies intestate without any heirs, or when a bank account remain inactive for a certain number of years and the efforts to contact the account holder prove fruitless. However, the money in the bank account is part of an estate and can be redeemed by beneficiaries.

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RELATED FAQS
  1. How can you reclaim escheated, or unclaimed, property?

    The process for reclaiming unclaimed or escheated property varies by state, as the federal government does not have a central ... Read Full Answer >>
  2. How much money does Texas make from unclaimed property each year?

    In 2014, the office of the Texas Comptroller of Public Accounts reported $234 million in unclaimed property claimant liabilities, ... Read Full Answer >>
  3. How can I avoid escheatment of my bank account?

    To avoid escheatment of a bank deposit account, either checking or savings, the owner should log on to his online account; ... Read Full Answer >>
  4. How long does a stock account have to be dormant before it can be escheated?

    A stock account is typically considered dormant and eligible for escheatment after five years of inactivity; however, this ... Read Full Answer >>
  5. Do banks have working capital?

    The concept of working capital does not apply to banks since financial institutions do not have typical current assets and ... Read Full Answer >>
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