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What is the impact of account inactivity on a savings account?

Curious about Savings accounts

What is the impact of account inactivity on a savings account?

The impact of account inactivity on a savings account can vary depending on the policies of the bank or financial institution where the account is held. Here are some common considerations:

1. Maintenance Fees: Some banks may charge maintenance fees for inactive savings accounts. These fees can gradually erode the balance of the account over time. It is important to review the terms and conditions of the account to understand any applicable fees.

2. Dormancy Period: Banks may have a dormancy period, which is the period of inactivity after which they consider an account dormant. During this period, the bank may start charging additional fees or take steps to close the account.

3. Escheatment: If a savings account remains inactive for an extended period, typically several years, the funds may be turned over to the state as unclaimed property through a process called escheatment. The account holder can reclaim the funds from the state's unclaimed property office, but it may involve additional steps and documentation.

To avoid the negative impact of account inactivity, it is generally recommended to keep the account active by making regular deposits, withdrawals, or transactions. Even small transactions can help maintain activity in the account. Additionally, staying informed about the terms and conditions of the savings account and regularly reviewing account statements can help account holders stay aware of any potential fees or account status changes.

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