Dormant Account

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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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