Idle bank accounts hold Rs 3,652 cr: 5 things you better know

Rs 3,652 crore. This is the sum that people like you and me hold in various banks in India and are not bothered about. Shocked? According to a data from the Reserve Bank of India, Indians hold so much of funds in inactive, dormant or in operational bank accounts, as unclaimed deposit. As per the data, there are more than 1.33 crore such accounts. These accounts include various types of accounts, right from savings accounts which give 4 percent per annum returns to fixed deposits which give double-digit returns.

In all probability every salaried person will at least one such account. This is because many a time when you hop job you start new savings accounts and forget about the earlier savings account.

Here are a few things to know about such accounts and how to redeem the funds stuck in them:

* Any account that has not been used for more than 10 years becomes an unclaimed account. Typically, when you don’t transact (debit or credit) for more than a year, banks call it an inactive or inoperative account. If an account remains inoperative for more than two years, it becomes a dormant account.

* Remember that a transaction that the bank makes from their side, like earned interest, transaction will not be taken into account. So, even if such accounts earn an interest, unless you don’t make transactions, they become inactive.

* Such accounts are a risk. First, bank employees may misuse it to embezzle funds. Remember Cobrapost money laundering expose? Such accounts could be used to launder money, funding terrorism, make illegal transactions, etc. Plus, if you have changed your address and your dormant account statements continue to go to older address, they might land up in wrong hands.

* Next, you also pay an opportunity cost. You could probably earn more returns if you invest the idle amount into another instrument like a Public Provident Fund (PPF). Also if such accounts has a minimum balance requirement, and for some reason your balance goes under that limit, your bank might just slap with you a fee.

In short, there are a number of risks when you keep accounts inactive, inoperative or dormant.

To fix the issue, simply make a single transaction via your ATM card or issue a check. If the card too is not working, you would need to visit a branch. If you make a request to make the account live again, it would take banks a few days to do the same.

Now that you know the risks, try and recollect whether you have any accounts that may be lying idle. A long forgotten account may even get you a bonanza.