The best thing to do with your savings account is set it up and then leave it alone to earn dividends. But there’s a catch, while we want you to set it and forget it so that you’re not pulling funds out of it all the time, you don’t want it to go dormant. A dormant savings account is one with a low balance that has had no deposits or withdrawals within a set timeframe. The exact criteria for dormancy vary at each financial institution.
The worst part is that having a dormant account can actually cost you money. After 12 consecutive months of no activity, your savings account will begin incurring a monthly $10 dormant account fee. That’s why it’s so important to make sure that your account doesn’t go dormant.
Here are a few steps you can take to prevent dormancy:
- Keep track of your accounts. You should know always where all your money is. Online and Mobile Banking allow you access to your account whenever you want and wherever you may be. There are also apps like Mint that let you monitor all your accounts in one place by combining them in one screen. This way, you’ll never risk dormancy by forgetting about an account. You can also go the more physical approach, by keep your account statements in a file folder and create your own ledger so that you have one place where you can see all your accounts.
- Automate your savings. An account can’t go dormant if it’s getting transactions regularly, even if it’s only $5 a month. But who can remember to do that every month, or would want that extra process? Make it easy by setting up automatic transfers between your primary account and your savings account. Automating savings deposits keeps your account active and increase your savings with all most no effort at all.
- Clean up and roll over old accounts. If you create different accounts for different savings goals, you might accumulate a dozen accounts over time, some of which you’ll forget to close when they’ve served their purpose. Each of those accounts is at risk for dormancy! One way to avoid this is to make a general-purpose savings account and consolidate your funds there once every few months.
- Keep your address current. Depending on your financial institution and how it handles your inactivity, you may be notified of inactivity before your account is charged a fee—or declared abandoned. Alltru Credit Union will mail a letter to the address or email on file after 11 months of inactivity. Be sure to update your address each time you move so that you can monitor important account information.
Here are some ways you can reactivate your account if you receive a dormancy notification. It’s easy to reactivate your account by conducting one of the following types of transactions:
- Make a deposit or withdrawal.
- Make an ATM or debit card transaction.
- Perform an electronic transfer within online banking to your account.
- Setup an ACH transaction such as a direct deposit to your account.
Act before it’s too late; clean up your dormant accounts today! We can help.
Until next time,