If you haven’t used your savings account for a long period, it might be declared dormant by the bank. This means the account is temporarily inactive but not closed. As per RBI guidelines, a bank account becomes dormant when there is no activity (such as deposits or withdrawals) for 10 years. Although dormant, these accounts can still earn interest on your savings, and reactivating them is a simple process.
Here’s how to understand dormant accounts and how you can easily reactivate yours without facing any penalties.
What is a Dormant Account?
A dormant account, also called an inactive account, is a savings account where no transactions (withdrawals, deposits, or other activities) have been made for a long time. According to the Reserve Bank of India (RBI), banks classify savings accounts as dormant if there are no transactions for a continuous period of 10 years. Dormant accounts pose no harm to your money, but you need to reactivate them if you want to start using them again.
Can You Withdraw Money from a Dormant Account?
Yes, you can withdraw money from a dormant account after reactivating it. While a dormant account may seem deactivated, the account remains in your name and is temporarily inactive, not permanently closed. To access your money, you will need to reactivate the account by following a few straightforward steps, which include contacting the bank and submitting the necessary KYC (Know Your Customer) documents.
Does a Dormant Account Earn Interest?
Yes, even if your account becomes dormant, the bank will continue to pay interest on your balance. Just like an active savings account, the funds in a dormant account are still earning interest. If you have any fixed deposits linked to the account, they will also continue to accrue interest despite the lack of recent activity. This ensures that your capital continues to grow, even if you haven’t made any transactions recently.
How to Reactivate a Dormant Savings Account
Reactivating your dormant savings account is an easy process, and no penalties will be imposed by the bank. Follow these steps to get your account up and running again:
1. Visit Your Bank Branch
The first step to reactivating your dormant account is to visit your nearest bank branch. You will need to carry the necessary documents for KYC verification.
2. Submit KYC Documents
You will be required to submit your KYC documents to verify your identity. These documents usually include:
- Identity Proof (e.g., Aadhaar Card, Voter ID, Passport)
- Address Proof (e.g., Utility Bills, Aadhaar Card)
- PAN Card
3. Submit a Reactivation Request
Once your KYC documents are submitted, write a formal request letter asking the bank to reactivate your savings account. This letter should be submitted to the bank’s concerned department. Many banks also offer the option to fill out a standard reactivation form, which you can obtain at the branch.
4. Document Verification
After submitting the required documents and the request letter, the bank will verify the information provided. This verification process generally takes 1 to 3 working days. The bank may also require you to make a small deposit or withdrawal to confirm activity in the account.
5. Account Reactivation
Once the documents are verified, your savings account will be reactivated. You will be informed via SMS or email when the reactivation is complete. After this, you can resume using your account for all kinds of transactions, including withdrawals, deposits, and online banking.
Why It’s Important to Keep Your Account Active
Keeping your savings account active ensures that you can easily access your funds without the hassle of going through the reactivation process. Simple transactions like making small deposits or withdrawals every few months can prevent your account from becoming dormant. Regular activity also helps maintain a healthy relationship with your bank and allows you to take advantage of banking services without any interruptions.
