When does your account become dormant?

current account requirements

Imagine this: you are a busy entrepreneur who has multiple savings and current accounts with different banks. One day, you decide to withdraw some cash from one of your older savings accounts, but to your surprise, your withdrawal request gets rejected by every ATM you try. When you contact the bank’s customer care, they inform you that your account has become dormant due to prolonged nonoperation.

This scenario is not uncommon, and many people face similar situations where their bank accounts become dormant because they fail to operate the account over an extended period. With increasingly busy lives, it’s easy to forget about an account that you don’t use frequently, making it dormant. But how long does it take for an account to become dormant? What are the consequences of a dormant account, and how can you prevent it from happening? Let’s find out.

When do bank accounts become dormant?

A bank account (current/savings) can become inactive after a period of 12 months of no activity. But if you do not make any transactions, withdrawals, or deposits for 24 months, your account may become classified as dormant. So, after completing the savings or current account opening process, you must monitor it regularly and keep it active. 

A major reason why banks classify accounts as active, inactive, or dormant is to prevent fraudulent transactions and protect the interests of customers. Inactive and dormant accounts are particularly vulnerable to fraud and scams since they are left unattended for long periods. By bringing attention to the accounts that are at higher risk, banks ensure that their staff conduct due diligence in monitoring such accounts. 

Restrictions on dormant accounts

If your savings or online current account has become dormant, you may not be able to carry out the following services/transactions: 

  1. Change of residence
  2. Adding or deleting a joint holder
  3. Addition or removal of a joint account holder
  4. Renewing of ATM/debit card
  5. Change of signature
  6. Transactions through Internet banking  

Note: The restrictions can vary from bank to bank, but these are some of the most common ones imposed on dormant accounts. 

How can you reactivate a dormant account?

You can reactivate a dormant bank account without incurring any additional fees! The Reserve Bank of India (RBI) has mandated that banks cannot charge customers any additional fees while reactivating their dormant accounts.

Simply visit your bank’s branch and apply to reactivate the account. Mention valid reasons in the application for the absence of any transactions in the account. 

Carry both original and photocopies of your PAN Card and officially valid KYC documents such as Voter ID Card, Passport, Driving License, and Aadhaar. These documents are necessary to verify your identity and secure your account. To save time and prevent any delay in the process, contact your bank first and ask about specific savings and current account requirements for reactivation.

To conclude

Although the bank usually informs you three months before your account is considered dormant, it is always wise to exercise caution. The best way to avoid a dormant account is to keep your account active. This means making regular transactions, withdrawals, and deposits in the account. Even if you do not use the account very often, make at least one transaction every 6 months to keep your bank account active and keep finances under control.