November 3, 2015
Dear Liz: A friend of mine had a savings account for many years but didn’t put any money in it for some time. When he went to take money out, the bank had taken the money because he hadn’t used it enough. Are banks allowed to close an account and take the money if the account hasn’t been used in a while without contacting you? If so, how long do you have before the bank can take the money?
Answer: One of two things can happen here. Either funds are eaten up by account fees, or an account is declared abandoned and whatever money was left was turned over to his state’s unclaimed property office.
The amount of time that has to pass before an account is declared abandoned varies by state and can be as little as one year. Some states expect banks and other financial institutions to make some effort to track down accountholders. In other states, little or no effort is required. In any case, your friend can use the website of the National Assn. of Unclaimed Property Administrators at https://www.unclaimed.org to see if his lost account is being held by his state. While he’s there, he may turn up other unclaimed property that belongs to him, since these offices also collect utility deposits, insurance proceeds, refunds and the contents of safe deposit boxes, among other property.
Liz Weston is “The most-read personal finance columnist on the Internet” (Nielsen/NetRatings) and author of “The 10 Commandments of Money” and “Your Credit Score.”