How to Reactivate and Withdraw Funds from Dormant Bank Accounts
It’s surprisingly common for bank accounts to become inactive or dormant. Life happens – you might move, forget about an old account, or switch banks. If you don’t make any customer-initiated transactions for a certain period (usually 12 months), your account becomes inactive. If this inactivity stretches even longer, typically over 24 months, your account is then classified as dormant or inoperative.
It’s important to note that only customer-initiated transactions (like debits or credits) count towards activity. Any interest credited by the bank or charges deducted won’t prevent your account from becoming inactive.
While banks won’t close these accounts, they do restrict services such as debit card use, net banking, and ATM withdrawals for security reasons. Thankfully, banks usually notify you before your account goes dormant and provide instructions for reactivation.
You can absolutely still access the funds in a dormant account, though it requires a few extra steps. Here’s how:
Steps to Reactivate Your Account and Withdraw Funds
- Contact Your Bank: Your first step is to visit the nearest branch of your bank. While some banks might offer online reactivation, most require an in-person visit for verification and security. Make sure to bring a valid ID (like your passport, Aadhaar card, or driver’s license) and your bank passbook/account number. If your address has changed, bring proof of your new address as well.
- Submit a Reactivation Request: At the bank, you’ll need to submit a written request to reactivate your account. The bank will likely ask for an updated KYC (Know Your Customer) verification to confirm you’re the rightful account holder. Some banks might allow for video KYC or a call verification to complete this step.
- Withdraw Your Funds: Once your account is successfully reactivated, you can withdraw your funds as you normally would. This includes cash withdrawals directly from the bank or fund transfers via NEFT or UPI. After accessing your funds, you can even choose to close the account if you no longer need it.
Important Things to Know
- No Penalties: As per RBI guidelines, banks cannot charge any penalties for reactivating dormant or inactive accounts.
- Continued Interest: You’ll continue to earn interest on your funds even while your account is dormant or inactive.
- Funds Transferred to DEAF: If your account remains inactive for over 10 years, your funds will be transferred to the Reserve Bank of India’s Depositor Education Awareness Funds (DEAF). However, you can still claim them by contacting your bank with the proper documentation.
How to Prevent Your Account from Becoming Dormant
Keeping your account active is straightforward. Simply ensure you make customer-initiated transactions every few months. Linking your bank account to a mobile wallet or UPI app and making regular small transactions is an easy way to prevent it from becoming inactive.
The process of reactivating and withdrawing funds from a dormant account might seem a bit involved, but these steps are crucial for protecting your funds and preventing any unauthorized activity.
Do you have any old accounts you’re looking to reactivate?