Millions of people in india leave their bank accounts unused, not realizing that their savings, current accounts, or even old FDs can become dormant or inactive. A dormant account can restrict transactions and may even require reactivation before use. Here’s everything you need to know.

1. What is a Dormant Account?

A dormant account (also called an inactive account) is a bank account that has not had any financial activity for a long period.

Key points:

· No deposits, withdrawals, or online transactions for a specific period.

· Banks mark such accounts as dormant to prevent misuse or fraud.

· You cannot perform transactions until the account is reactivated.

2. How Long Does It Take for an Account to Become Dormant?

The period after which an account becomes dormant varies slightly depending on the bank and account type, but generally:

· Savings and Current Accounts: 12–24 months of inactivity.

· Fixed Deposits (FDs): If linked savings accounts remain inactive, the FD may also be flagged dormant after similar periods.

Tip: Check your bank’s official policy for exact timelines.

3. Why Do Banks Make Accounts Dormant?

· Security: Protects against unauthorized access or fraud.

· Regulatory compliance: Banks follow RBI guidelines on dormant accounts.

· Operational efficiency: Helps the bank track active versus inactive accounts.

4. How to Reactivate a Dormant Account

· Visit your bank branch with valid identity proof (Aadhaar, PAN, passport, etc.).

· Fill a reactivation form provided by the bank.

· Perform a small transaction (deposit or withdrawal) to reactivate the account.

· Some banks allow online reactivation through net banking or mobile apps.

5. Things to Keep in Mind

· Interest on savings accounts may continue to accrue, but check if dormant status affects credit.

· Auto-debit payments or standing instructions may fail during dormancy.

· Unclaimed balances in dormant accounts may eventually be transferred to the Depositor education and Awareness Fund (DEAF) as per RBI rules.

Conclusion

A dormant account is essentially a sleeping account that needs reactivation before use. By keeping track of account activity and updating your bank about long periods of inactivity, you can avoid inconvenience and ensure your funds remain accessible.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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G GOWTHAM

02/12/2025 12:27 PM