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What is an acceptable amount of time for a savings account to go dormant?
Posted on 12/29/17 at 9:05 am
Posted on 12/29/17 at 9:05 am
I setup a savings account for my son a few years ago bc my in laws give him some money for Christmas and birthdays. I basically make an annual deposit. I just got a letter in stating that if I don’t have activity on the account soon, they will change the status to dormant and start charging a fee. Their dormant status goes in to effect after 1 year. This year for Christmas we didn’t get any money for the kids, which we expected for other reasons.
I certainly don’t mind going deposit some money in the account to keep it active. However the reason I chose the savings account to begin with was the thought that I don’t need to touch it. I have all my personal stuff with capital one and I am fairly certain I’ve had accounts go longer than one year without activity and no fees. I set up this account at a small town bank thinking it would be easier to deal with for my kids down the road And there is no need to have easy access to ATMs like I do with Capital One.
I guess my question is should I expect this at every bank? Or is this outside the norm? FYI the account has over $5k so it isn’t low balance fees.
I certainly don’t mind going deposit some money in the account to keep it active. However the reason I chose the savings account to begin with was the thought that I don’t need to touch it. I have all my personal stuff with capital one and I am fairly certain I’ve had accounts go longer than one year without activity and no fees. I set up this account at a small town bank thinking it would be easier to deal with for my kids down the road And there is no need to have easy access to ATMs like I do with Capital One.
I guess my question is should I expect this at every bank? Or is this outside the norm? FYI the account has over $5k so it isn’t low balance fees.
7
Posted on 12/29/17 at 9:31 am to notbilly
Move that money to a credit union or a brokerage account and put in an index fund.
This post was edited on 12/29/17 at 9:32 am
Posted on 12/29/17 at 10:26 am to notbilly
When my bank did that to me I withdrew all of my money from all of my accounts and switched banks. Charging me a fee to have money in a "savings" account, with a paltry interest rate less than 1%, is absurd. I opened a Capital One 360 checking and savings account and have been very pleased.
Posted on 12/29/17 at 10:30 am to Lou
quote:
When my bank did that to me I withdrew all of my money from all of my accounts and switched banks. Charging me a fee to have money in a "savings" account, with a paltry interest rate less than 1%, is absurd. I opened a Capital One 360 checking and savings account and have been very pleased
Whitney has fees for some of their checking accounts if you don't maintain a minimum balance. Is this normal...do most banks do this?? I've been charged a $12 fee several times over the last couple years for supposedly not maintaining the minimum balance. I've been meaning to go march into their office and tell them to frick off, I want my money back...
Posted on 12/29/17 at 10:35 am to Roberteaux
Yes most banks have a monthly service charge for checking, but the fee is waived if you keep a minimum balance. I know I sound like a broken record, but Capital One 360 is free, no minimum balance required. I can't recommend it enough.
Posted on 12/29/17 at 10:35 am to notbilly
Have you considered calling the bank and talking to them about it?
Posted on 12/29/17 at 11:12 am to notbilly
Same thing happened with my daughters saving account, I switched banks. 5th district and Cap One are easy to deal with.
Posted on 12/29/17 at 11:17 am to notbilly
Invest that money instead. If you insist on a savings account move to another bank like Ally that does Hugh yeild savings account
Posted on 12/29/17 at 11:19 am to southernelite
quote:
Move that money to a credit union or a brokerage account and put in an index fund.
I planned on moving it to a vanguard account eventually. While there is over 5k in the account, only about 2k is “his”. The rest is some that I deposited earlier in the year and parked it in his account figuring he’d earn a coupe bucks of interest as opposed to holding it in my account until I need to pull it out. Once he gets over 3k of his money, i plan to move it over.
Posted on 12/29/17 at 11:19 am to notbilly
quote:
Escheatment is a process whereby the government takes ownership of property, including financial assets, that has been deemed abandoned by the property’s rightful owner.
Escheatment of financial accounts typically occurs after a period of account-related dormancy (or “inactivity”) and after attempts to identify and contact the account owners have failed.
The dormancy period is determined by the type of property (e.g., payroll checks, insurance payouts, bank accounts, CDs, Health Savings Accounts as opposed to securities), and can vary from as little as one year to as long as 15 years.
There is no uniform standard in the United States regarding the length of time required for an account to be escheatable.
The definition of inactivity also varies by jurisdiction. Some jurisdictions require that an article of mail be returned to the broker or other custodian as undeliverable. Other jurisdictions deem an account escheatable if the owner has not contacted a broker or other custodian for a specified period of time.
Financial institutions are required to attempt to contact account owners before escheating property to the state. What qualifies as an “attempt” can be as varied as the definition of “inactivity.”
For example, some state authorities take out advertisements in newspapers to provide notice of escheatable property, notwithstanding that the owners of the property may not reside in the vicinity. If there is no valid address associated with an account, it can be escheated to the state of incorporation of the financial institution with custody of the account.
Regardless of the jurisdiction, institution, or account type, the policy is listed in the disclosures you read and acknowledge when opening the account.
I would expect a year without activity to go inactive and at least another year to go dormant for a savings account.
I would expect half that for a checking account.
I have a family member that almost "lost" a brokerage account to the state for the same reason.
Posted on 12/30/17 at 3:03 am to notbilly
quote:
Once he gets over 3k of his money, i plan to move it over.
STAR is a nice general diversified fund whose mini is 1k.
Posted on 12/30/17 at 3:43 pm to notbilly
just deepsit $! into the amount. they probably just do this so that the acornt is not dormant for many years would be my guess. i would think any money taken an or out would count as some activity
Posted on 12/30/17 at 4:38 pm to Hand
quote:
I would expect
quote:
I would expect
Yeah, but it doesn't mean those policies aren't bull shite. The purpose of a savings account is to keep it safe from crooks, but those banks are more likely to steal than a burglar.
I ran into the same thing with my kid's savings accounts. The bank bled them dry. We raised hell, threatened to pull our checking accounts away from them, and they gave us the money back. We move the kid's savings accounts to another bank (we checked their policy first) and haven't had a problem since.
This post was edited on 12/30/17 at 4:40 pm
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