Business, Legal & Accounting Glossary
When there is no activity in a bank account for a period of a year or more, and the bank can’t get in touch with the account holder, then the account will be made dormant.
This means that no statements or other material will be sent out to the account holder’s last known address as a safeguard against identity theft.
Although the account will no longer be active, the bank will still keep track of any funds it contains and pay the interest due where appropriate.
The most common reasons for an account going dormant are that the customer moved home and didn’t inform the bank, forgetting about a small balance in an old account, or that the account holder has died.
It’s estimated that up to £5bn may be sitting unused in UK dormant accounts.
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This glossary post was last updated: 15th February, 2020 | 1 Views.