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Dormant accounts

It can be easier than you think to forget about savings accounts.

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Whether you’ve moved houses or are trying to recover an account that was opened for you as a child, you can reclaim your funds with just a few steps

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What is a dormant account?

A dormant account is a bank or building society account which hasn’t been touched for some time (typically between three and 15 years), despite attempts by the savings provider to get in touch with the account’s owner.

How long does it take for a bank account to go dormant? 

The time can vary depending on the provider, so consider asking your bank what their cut-off period is before trying to reclaim your funds as your account may still be active.

If the account hasn’t seen any transactions for an extended period of time, the provider will then attempt to contact you. If it can’t reach you for up to four months, your account will become dormant.

Even if the account has been dormant for many years, you will still be able to gain access to your money by following a few short steps. 

Why could a bank account become dormant?

When there is a complete absence of activity in your account – meaning no withdrawals or deposits were made to your account – it’s usually safe to assume the account has become dormant.

If your statements or any other communication are returned to your bank or building society, it indicates that the provider can’t get hold of you. They’ll still attempt to contact you in other ways such as by phone or email, but if this continues for a few months, the account will become dormant.

Banks resort to dormancy to prevent any potential of fraudulent activities including identity theft – for example, when you move home your bank statements may be delivered to an outdated address.

As a result, your privacy may be breached as others may now have sensitive information and gain potential access your funds.

What happens when your account is declared dormant?

If your account has been dormant for 15 years or more, then banks and building societies can transfer the unclaimed money in that account to an independent body called Reclaim Fund through the Dormant Account Scheme to donate to good causes.

The scheme was established under the Dormant Bank and Building Society Accounts Act 2008, and since its 2011 launch, the UK’s largest banks and building society have transferred funds from dormant accounts into the scheme. To date more than £600 million has been channelled towards vulnerable populations such as those living in poverty, and to help people find employment and housing.

Under the scheme, funds can only be transferred from accounts that are dormant for 15 years or more. Reclaim Fund will keep a portion of the funds for account holders who do come forward to claim their savings.

In May 2020, the government announced the withdrawal of more than £150m from dormant bank accounts to help plug the gap caused by the coronavirus outbreak. The funds will be distributed to charities to support families at risk, while also further funding support for individuals on the government’s list of ‘vulnerable’ people most seriously at risk from Covid-19.

How can customers reclaim their funds?

You can reclaim funds from a dormant account at any time and the easiest way to do so is to contact your bank or building society account provider.

You’ll usually be asked to provide as much information as possible about the account, including:

  • The account number
  • The name of the account holder
  • The account balance
  • Whether you can provide any statements

The more information you can provide, the easier it’ll be to verify your identity and reclaim your funds.

If you don’t have these details, or are not sure if you have a dormant account, an alternative way to tracing old bank accounts is through MyLostAccount, a free service set up as a joint venture by the British Banker’s Association, The Building Societies Association and National Savings & Investments (NS&I) to help you trace your lost account and savings.

After verifying your profile, you can fill in the search form and your application will be used to filter through lost bank and building society accounts as well as lost National Savings and Investment products. You’ll receive a letter or email to let you know about the results or whether you’ll need to provide additional information.

Do you have a dormant account in your name?

Often when an account is opened in your name as a child, it can be left untouched and turn become a dormant savings account. If you manage to get hold of old statements or paperwork from the parent or guardian that opened the account in question, it’ll likely help speed up the process. Once you have the necessary papers, you will be able to access your funds to withdraw or transfer as and when you need to.

It can also be the case that your old account turns dormant during the process of moving house. If you did not let your bank know about the change of address, any correspondence you ought to be receiving from your bank may not have reached you, or may be being returned to them. This, along with the account seeing no transactions in a number of years, could cause the bank to declare your account dormant.

Name changes, for example, if you get married, can also cause you to lose track of old savings accounts if these were registered to your previous name.

Reclaiming dormant funds of deceased relatives or family members

If a relative has passed away and left money in an account, you may have the right to the funds of the account registered in their name. But bear in mind that account will have had to be classed as dormant – if it is still deemed as an active account because there has been activity within the past 15 years – you may not be able to make a claim.

You would have to provide evidence of your identity and your right to claim the money. If you have an iron-clad will, for example, this will make the process relatively hassle-free. It’s worth noting however that if the amount you’re trying to claim is exceptionally high, there may be more stringent rules specific to the amount you’d have to abide by. This means it might take longer to verify your identity and claim the money.

How long does it take to find an account?

Banks and building societies typically take up to three months to locate your savings. The length of time it will take to track down your savings often depends on how much information you have been able to provide. If you have only a few details, the chances are it will take longer than if you can provide the account number and sort code.

Can a dormant bank account be reactivated?

If the account has only been made inactive but not yet dormant, a simple transaction will reactivate your account. This can be done via an ATM withdrawal or through internet banking. Inactivity is usually only the case if your account hasn’t been active for a year or two.

If your account is dormant, you will have to contact the provider directly to get the account reactivated. You will need to provide as much information as you can and you won’t be able to make transactions from the account until it is reactivated. You can also submit a form online via MyLostAccount.

What happens to dormant bank accounts?

Limits will be placed on the account to make sure no one is able to access it.

  • ATM use is blocked
  • You won’t be issued new cheque books and debit cards
  • Some banks block internet banking altogether

How do you stop your bank account from becoming dormant?

By carrying out regular transactions such as withdrawing or depositing money regularly, you’ll be able to prevent the account from being classified as dormant. This includes anything from cheque payments and internet banking to using ATMs and phone banking.

Interest payments or penalty deductions are not considered active transactions as these are completely bank-initiated. While these are technically transactions, they can’t verify that you are actively using your bank account.  

Things you should know about dormant accounts

Here’s a few more things to consider about dormant accounts:

  • Any interest you received on your account is still legally yours. This means even if your account was classified as dormant, you should still receive the interest you would have received so make sure you’re fully reimbursed
  • Savings accounts can remain ‘active’ for a longer period, roughly three to five years of inactivity as opposed to current accounts which can become dormant after only 12 months
  • You can also trace back dated Premium bonds and other National Savings and Investments through MyLostAccount.
  • Dormant accounts usually pay relatively low rates of interest, as banks and building societies reserve their best rates for the latest issues of their accounts, so you won’t want to leave your savings there any longer than you need to
  • If you are searching for unclaimed Premium Bond prizes, you can enter your account number into the online prize-checker search on the NS&I website.

Compare savings accounts with MoneySuperMarket

When it comes to switching savings accounts, there’s a few things to consider, from making sure the account suits your saving habits to finding the most competitive interest rates.

Find out how your current rate compares by heading over to our savings account comparison - and upgrade your account to benefit from the best out there. You can tailor your search to your specific needs by telling us what your starting balance will be and how long you can wait to access your cash, as well as a provider you may have your eye on.

We’ll give you a list of potential savings accounts best suited to your needs, be that easy access, fixed or ISA accounts.