Dormant Account: Meaning, Functioning, & Reactivation Tips (2024)

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Have you ever had a bank account that you forgot about and stopped using? If so, it might have become what banks call a 'dormant account'. This simple guide will help you understand what a dormant account means, how it's different from your regular bank account, and how you can easily reactivate it.

What is a dormant account?

A dormant account is a bank account that hasn't had any activity for a long time - for a year or more. 'Activity' here refers to any transaction you do, like putting money in or taking it out. Banks label these accounts as 'dormant' to protect them. If you don't use an account for a long time, you might forget about it, exposing it to unauthorised activities. By making it dormant, banks help keep your money safe.

Working of a Dormant Savings Account

Your Savings Account will become dormant if you don't use it for about 12 to 24 months. This does not mean that you will lose your money or that the bank will close your account. The account is still there, but you can't do some things anymore, like using online banking or withdrawing money from ATMs. The good part? Your money still earns interest, just like it did before.

Also Read: 6 things to consider before opening a Savings Account

Difference between inactive and dormant bank accounts

  • Inactive account: This happens when you don't use your account for a shorter time, such as 6 months to a year. The account still works as usual, but the bank starts paying more attention to it to make sure it's safe.
  • Dormant account: If you continue not using your account for more than the inactive period, it then becomes dormant. This means your ability to use the account is greatly reduced for security reasons.

Also Read: How to reactivate an inactive or dormant Savings Account

The escheatment process for dormant accounts

The government may receive the money from a bank account that remains dormant for a very long time. This process is called the escheatment process. Here's what usually happens:

Step Description
1. Notification The bank will first try to contact you to inform you about the dormant status.
2. Waiting period There's a waiting period (which can vary from state to state) to give you time to reactivate the account.
3. Last call If the bank doesn't hear back from you, they'll make one last attempt to reach out before the escheatment process begins.
4. Transfer of funds If there is no response, the treasury department will receive the funds from the account.
5. Claiming funds You or your heirs can still claim the money from the government by providing the necessary proof of ownership.

Dormant account restrictions

An account that hasn't seen any activity for a while will receive a 'dormant' tag, essentially putting it on pause. This means you can't use it for everyday things like online banking, making calls to the bank for transactions, taking money out of an ATM, or writing cheques.

Axis Bank will alert you 3 months in advance if your account has seen no activity for some time and is on the verge of becoming dormant. They'll send a letter to your residential address, an email or a text message. If you share the account with someone else, they'll make sure everyone connected to the account gets the message.

Reactivating your dormant account

The Reserve Bank of India wants to make sure you can get your dormant account back up and running smoothly. Here's what you need to do:

1.Write to the bank saying you want to reactivate your account. If you share the account with someone, you'll both need to sign the letter.

2.Update your personal details with the bank. They'll want to see your PAN card, proof of residence, and other valid IDs.

Also Read: Savings Account uses you might not know about


To wrap things up, Axis Bank not only simplifies the process of reactivating dormant accounts for its customers but also offers a plethora of options catering to the diverse financial needs of individuals from various walks of life. Remember, the key to avoiding the complexities of dormant accounts is simple: regular transactions.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision

Dormant Account: Meaning, Functioning, & Reactivation Tips (2024)
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