What is a Dormant Account?

Initiatives like the Pradhan Mantri Jan Dhan Yojana offer zero-balance accounts to encourage financial inclusion. People have opened multiple accounts across different banks including zero balance accounts.

Managing multiple accounts can be difficult like monitoring bank balances, prolonged periods without transactions, and other related issues. These factors can ultimately lead to an account being classified as dormant.

For account holders, dormant accounts may lead to missed opportunities, unclaimed funds, or even the risk of additional fees imposed by the banks.

In this article, we will discuss What is a Dormant Account, how a dormant account works, how to claim a dormant account balance, etc.

What is a Dormant Account

`What is a Dormant Account?

A dormant account refers to a bank account that has remained inactive or dormant for more than two years. When the account has no financial activity, such as deposits, withdrawals, or transfers, within the account for a prolonged duration.

Dormant accounts may result from various reasons, including the account holder’s oversight, relocation, shifting financial priorities, or a lack of awareness about the account’s existence.

These accounts often remain in a state of dormancy until revived by the account holder by contacting the bank.

How a Dormant Account Works?

A dormant account functions differently from active accounts due to its lack of recent activity. Here’s how a dormant account works-

Inactivity Period

When an account remains inactive for more than a year then the account is referred to as inactive account.

Inactivity of the account means when there are no transactions initiated by the account holder whether it’s a debit or credit transaction. During the inactive period, you can still initiate transactions without any penalty or reactivation required.

After attaining an inactivity period of more than 1 year, the bank may contact you to notify you about the status of the bank and further you to initiate some transactions.

Reactivation Options

To reactivate a dormant account, the account holder needs to visit the bank premises and re-activate the account using KYC.

Dormant Status Change

After a period of inactivity, if your account remains inactive, it will be converted into a dormant account. The bank will notify you before changing the status of your account to dormant, providing you with an opportunity to take action. You can choose to reactivate the account or allow it to remain dormant.

How Can I Claim My Money From a Dormant Account?

As per the Reserve Bank of India (RBI) guidelines, reclaiming funds from a dormant account involves specific procedures to ensure transparency and safeguard the account holder’s interests. You can follow these steps to claim your money from a dormant account-

  • The first step is to visit your bank along with your identification documents like Aadhar Card, PAN Card, Passport, etc. along with the bank passbook
  • Now ask the bank representative to reactivate your dormant account, he/she may ask you for your identification followed by reactivation fees (if your account is empty)
  • After verifying your account and your identification, the bank representative will update your account status, and your account can be used as usual

Can I Close a Dormant Account?

Yes, you can close a dormant account. Dormant accounts may have certain restrictions or requirements for closure which will be communicated by the bank at the time of closure.

You can visit the bank branch in person or reach out to their customer service channels via phone, email, or online banking platforms to ask then more account closure.

You may have to provide valid identification documents to verify your identity and ownership of the account followed by a filled closure form.

If there are any remaining funds in the dormant account, the bank will facilitate their transfer using a cheque or DD which you can cash. After processing your closure request and settling any outstanding balances, the bank will confirm the account closure


What is a dormant account?

A dormant account refers to a bank account that has been inactive for more than two years, typically with no transactions or account activity.

How does an account become dormant?

An account becomes dormant due to a prolonged period of inactivity meaning no transaction of debit or credit made for a long period typically, more than two years.

Can I access funds from a dormant account?

Yes, you can reclaim funds from a dormant account by visiting the bank branch and asking for the reactivation of your dormant account.

What happens if I don’t reactivate my dormant account?

The banks will retain your dormant account, along with the funds within, for a minimum of 10 years. However, if the dormant account remains unclaimed or inactive during this period, the account balance will be transferred to the Depositor Education and Awareness Fund Scheme, overseen by the RBI.

Can I close a dormant account?

Yes, you can close a dormant account by contacting the bank, submitting a formal closure request, and settling any outstanding balances.

Are there any fees associated with dormant accounts?

Yes, banks charge a closure fee for closing dormant account fees or charges for maintenance.