Dormant Checking and Savings accounts are among one of the most common unclaimed property items in the State of Minnesota. That being said, the staff at the First National Bank of Osakis want to make sure that we do our due diligence, so that your inactive account doesn’t become state owned property too. Hence the reason we send those inactivity and dormancy letters out to our customers informing them there has been no activity on the account and giving them the option to reactivate. Having a financial account go into a dormant or inactive state is nothing to feel ashamed or embarrassed about. Life happens, and we are here to help.
Having a bank account go inactive or dormant is usually not something that is planned by our customers. It typically takes our customers by surprise when they get that initial inactivity letter from the bank and a flood of questions enter their mind. I am here to hopefully answer some of those questions you may have, explain the dormancy process more in depth, and provide you with some tips on how to keep your account out of an inactive state.
First, let’s touch on how an account becomes inactive or dormant. A bank considers an account dormant when there are no transactions made on the account within a specified period, typically 1 to 2 years at most financial institutions. At the First National Bank of Osakis dormancy starts after 1 year of inactivity, meaning there has been no deposits or withdrawals made on the account for 12 months. After 11 months of inactivity we send you a courtesy letter stating the account has been inactive and in 30 days the account will be put into a dormant state. At this time, the customer will need to act on the account to avoid the dormancy stage. At FNB you can simply make a transaction on the account (either a deposit or withdrawal), contact us and inform us you want the account to remain active or you can send the bottom of the letter we send signed and dated back to the bank. Once one of these options is completed the account will be removed from the potential dormancy process. Whala!
In some instances, the letter either never makes it to the customer or back to the bank. In this instance it is typically because we do not have a current address or contact information for our customer on file in our database. If at this point the customer did not take action the account will be placed into dormancy after another 30 days from receiving that initial inactive letter from us. We will also send you one more letter once your account enters dormancy. This letter is our last effort to inform you that the account has become dormant.
What Dormancy Means For You
The question you are probably asking yourself is what does dormancy mean for me and my account? The first thing most customers become privy to quickly is the $2 dormancy fee that is charged to your account on a monthly basis. This fee starts after your account has been inactive for one year and is put into the dormancy stage. The most asked question is, why do we charge it? The honest and transparent answer is financial institutions do accrue costs for dormant accounts. When your account goes dormant the bank is required to not only continue to send you statements, but also acquire special reports and processes for the dormant account. Not only is the bank trying to recoup some of the cost of not only sending, but re-sending bank statements and letters to you, but the immense reporting that is required for dormant accounts is extremely time consuming. We must take extreme caution and be very diligent if and when the accounts go inactive. Meaning, on each and every dormant account our staff have to actively view transactions and verify if the transactions are indeed legitimate. Dormant accounts are a great way for not only thieves to make fraudulent acts on your account, but also money laundering. The other reason that we must do special reporting is the State of Minnesota requires intricate reports be given to them on the account once it becomes dormant and through the dormancy process.
After three years of the account sitting in dormancy and no contact from or with the customer has been made the account must be forfeited over to the State of Minnesota. We, as the financial institution, have no bearing at this point on what happens to your account. That is why we are diligent in making sure that it never gets to this point. Once your account has been forfeited to the state, not only will you have to claim your property, but you will also have to pay penalties and fees to receive it. The bank is not responsible for the unclaimed property process, the fees associated, or the time line at which we must forfeit your assets. This is strictly based off rules and regulations that the state has put into place. To learn more about the State of Minnesota’s unclaimed property process visit https://mn.gov/commerce/consumers/your-money/find-missing-money/.
So, the important question is how can you prevent dormancy in the future? How can you prevent your accounts becoming unclaimed property and in the hands of the State? The good news is that there are several easy steps that can be taken to make sure that you account is both active and up to date.
KEEP TRACK OF YOUR ACCOUNTS
It should go without saying that you will always want to know where all of your money is at all times. For those tech savvy customers of ours monitoring your accounts can be as simple as logging into your online banking account or accessing our FNB app. Both of our online banking modules are a perfect tool to view all of your FNB accounts in one place.
The more traditional and less digital approach would simply consist of keeping all of your most recent banks statements in a file folder. The main objective with either option is to always be aware of where you are banking and what your balances are. It may also be a good idea to keep a spreadsheet or documentation listing all the financial institutions that you bank with, the account types, and general contact information for them.
KEEP YOUR INFORMATION UP TO DATE
I cannot stress the importance of keeping your contact information up to date with your financial institution. Let’s face it, when your life changes in big ways (like moving or changing your phone number) calling the bank isn’t the first thing in mind, but it should be. Making sure that the bank has updated contact information is a security net for you, knowing that at any time you are able to be contacted by your financial institution. The letters that we spoke about earlier in this post are a prime example. If we don’t have your most recent address on file you won’t receive our initial attempt to contact you and inform you that your account has been inactive or receive the final letter stating your account has reached dormancy. Therefore, eliminating your ability to act on the account, because you simply didn’t know it had become dormant or inactive. One of the main reasons most accounts are turned over to Minnesota’s Unclaimed Property Division is because a customer did not notify us when they received a new phone number or had a change of address, giving us no way to contact them.
CLEAN UP AND ROLL OVER UNUSED ACCOUNTS
If you are one of those people who create different accounts for individual goals or have several accounts at an array of different financial institutions, then it may be safe to say that you may have accumulated multiple accounts over time. It is easy to forget to close out an account that maybe you used for a specific reason and there were only a few dollars left in the account. Or maybe you opened a checking account at one institution and decided to switch, but you just didn’t want to take all the funds out of the old account. A few dollars left in this account, a couple twenty in that one – you may end up with a hundred dollars spread out through multiple accounts. Eventually, you may forget what you have and where you have it. Or you could simply be missing out on better rates or incentives, just by not have those multiple accounts bundled into one. This is more reason to take a look at how many accounts you have and consolidate as much as possible. Look at the options on the table and see which one speaks true to the goals you have in mind for your future. Then, consolidate all those tiny accounts into one primary account you can use for everything you need.
KEEP YOUR ACCOUNTS ACTIVE
And lastly and most importantly, keep your accounts active. If you have a savings or checking account either here or at another institution they will require activity on the account. This activity could be either a deposit or withdrawal. Transactions of any type keep your account active, out of dormancy, and avoid the chance of it being turned over to the State as unclaimed property.
Busy lives sometimes make it difficult to remember when to transfer funds, so automate your savings/checking account. If remembering to make a transfer is something you are worried about then look into setting up an automatic transfer from one account to another may be a great option for you. These transfers can be set up to occur daily, weekly, monthly, or even yearly. And with our integrated online portal and mobile app you can do these transfers from the comfort of your home with a simple finger click. This form of automation will keep your account active and your worries of dormancy at bay.
In this piece I have explained how your account can become dormant, what the dormancy process is, how it will affect you as a customer, and ways that we can work together to make sure that your account never becomes inactive or dormant. Essentially the most important point to not only you, but the staff at FNB is that we are very transparent in this dormancy process and we work together to make sure that your account never becomes another asset sitting in the State vault of unclaimed property.
If you believe you may have unclaimed property at the State of Minnesota, simply visit https://www.missingmoney.com/