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What is Inactive or Dormant Bank Account?

If you haven’t used your savings or current account for any transactions for over 1 year, the account becomes inactive. If the account has been inactive for 2 years, it becomes dormant or inoperative. To avoid this from happening, you can carry out transactions like outward bill, cheque transactions, cash deposits, cash withdrawals, etc.
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Savings Account
  • Instant money transfer
  • 24x7 ATM withdrawals
  • Attractive rate of interest

It is a common phenomenon to hold many savings accounts in our name, but not being able to keep it active. It isn’t simple to keep a tab of multiple savings bank accounts. It increases confusion and mismanagement. If you don’t pay heed to managing your inactive bank account it can cost you money. This article explains that how can you reactivate your dormant bank account as it hasn’t been operated for 2 years, and why does the bank render them inactive.

Definition of a Dormant / Inactive Bank Account?

If you SB or current account hasn’t witnessed any transactions(credit/debit except interest credited the bank, deduction of service charges, for more than 1 year, the account is rendered inactive. On exceeding 2 years, the account is declared dormant/inoperative.

What Kind of Transactions Should I do to Keep Saving Bank Account Active?

Any customer induced transaction is enough for this purpose. Like credit or debit transactions done by the account holder in this account, keeps it active. Some of them have been listed below -

Outward bill

Inward bill

Transactions through cheque.

Deposit of cash

Deposit through cheque

Cash withdrawal or deposit via ATM.

Internet banking transaction

Crediting interest earned mandate on Fixed deposit to Savings Bank Account

Why Does the Bank Render a Saving Bank Account Dormant?

The bank takes this step of making your saving bank account inactive to ensure security and protecting your money from the risk of fraudulent transactions. this is for both internal employees and external customers. Once an account is not used for a long time since years, bank employees can easily get a sample of the account holder’s past signatures. With this it becomes extremely easy for them to access the deposited money by using withdrawal slips. Hence, to save your account from such frauds, banks group it into a single cluster and maintain details of inactive accounts in a separate ledger.

What are The Consequences of Having an Inactive or Dormant SB Account?

Account Holder of an inactive account can’t perform many operations. A cheque book be cannot be issued to you, the restrictions on the account operations become tighter. Requests for the following can’t be filed -

  • Change of address
  • Signature modification
  • Addition or deleting a joint holder
  • Renewal of ATM/debit card
  • No cash withdrawal from an ATM
  • No transactions either through internet banking or a branch of the bank

What is The Difference Between a Dormant Account and Frozen Bank Account?

They are two separate things. On freezing a bank account, there can be no transaction through the same till further notice. Funds cannot be debited from the account, even on the specified date. If the account holder has issues some cheques earlier, the payments for the same will be stalled, but for any deposits in the row, that can be credited. Reserve Bank of India, Securities and Exchange Board of India, courts and income-tax authorities have the authority to get a bank account to freeze.

An inoperative bank account entails a penalty, which depends on the concerned bank’s policy. The penalty holds true only during the period when the account is non-operational. This charge is levied on an annually and isn’t a lot. Also, customers are penalized if the minimum account balance is not maintained. The charges may differ from bank to bank.

For HDFC Bank, the average minimum balance of an account in an urban/metro is Rs 10,000. It is Rs. 5000 for accounts held in rural or semi-urban area is Rs 5,000. On not maintaining this minimum balance, a charge of Rs 750 is levied, quarterly basis.These charges are deducted directly from the account.

However, interest is still credited to your saving account on a regular basis even after the account is declared inactive or dormant.

Will the Account Holder Get any Notification When his Bank Account is Made Dormant?

Yes, usually banks intimate the customer two to three months prior to making the account inactive.

How to Reactivate a Dormant Bank Account?

Dormant bank account can be reactivated for you to start operating it or closing it. The reactivation process differs from one bank to another. Usually, the account gets activated within 24 hours. For this purpose an account holder needs to make a transaction by cheque or ATM. If one has other active accounts, he can send a secured message to the bank from his Personal Internet Banking ID. This needs to come with an instruction debit at least a rupee from this account to the other.

For reactivation of an inactive account, submit a duly filled application to the bank justifying the reason for your absence. Banks are very strict and methodical when it comes to verifying customer credentials before reactivation of accounts. The account holder needs to be physically present themselves with a valid address proof and valid identity proof. He needs to take these to the nearest branch, to duly fulfil the Know Your Customer (KYC) formalities. As per RBI guidelines, charges for activating dormant account cannot be levied.

What Are the Preventive Methods that Can be Taken to Protect Your Account from Becoming Inactive or Dormant?

There are many. Keep using your account before it turns inactive or dormant. Carry out a transaction, Withdraw cash, transfer funds through any of the banking channels, or make a cheque payment to ensure that your account remains active. Carry out a transaction once in awhile, at least once a year, in all your accounts if you want to escape bearing the penalty or having to run to

If you have shifted cities or countries, you can use net banking to transfer small sums between two accounts. If the account is no longer useful, best is to close the account.

Even Mandate for Crediting Interest from FD to Saving Bank Account is a Customer Induced Transaction?

There may be instances where the customer has given a mandate for crediting the interest on Fixed Deposit account to the Savings Bank account and there are no other operations in the Savings Bank account. Since the interest on Fixed Deposit account is credited to the Savings Bank accounts as per the mandate of the customer, the same should be treated as a customer induced transaction. As such, the account should be treated as operative account as long as the interest on Fixed Deposit account is credited to the Savings Bank account. The Savings Bank account can be treated as inoperative account only after two years from the date of the last credit entry of the interest on fixed deposit account.

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Savings Account Reviews

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  • ICICI Bank Debit Card
    "Good"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I am using ICICI debit card for almost 10 years. They have provided me a domestic card. There is no yearly charges because of my salary account. There is no benefits and the accessibility of the card is good. The daily withdrawal limit is sufficient. ATM's are pretty good.
    Was this review helpful? 29
    , kolkata
    Reviewed on May 12, 2019
  • YES Bank
    YES Bank Debit Card
    "Good"
    YES BANK
    0.5 4.0/5 "Great!"
    I think its nice to apply, it has been very fast and easy let's see what happens next if its open means I'll be very much happy person, pleas let me no soon that I can be a customer of this bank I had pan card permanent account number and I didn't have addar card though.
    Was this review helpful? 58
    , hyderabad
    Reviewed on Mar 20, 2019
  • Kotak Debit Card
    "Better"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I am having a Platinum Debit card from Kotak Mahindra Bank. The daily withdrawal limit is sufficient. I don't get any benefits on the card but its easily accessible everywhere. I got a hidden charges of 150 rupees which was debited from my account. There is no charges for other ATM swipes and there is no limitation.
    Was this review helpful? 79
    , mumbai
    Reviewed on Jan 28, 2019
  • Kotak Debit Card
    "Worst Kotak 811 services"
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    Opened an account in December 2018 not received any call from customer care for document completion till yet also visited the nearest branch and no action has been taken . Worst services of this bank . Even the executive and staff has not been responsible and their behavior is also very rude.
    Was this review helpful? 86
    , new delhi
    Reviewed on Jan 16, 2019
  • YES Bank Debit Card
    "Good"
    YES BANK
    0.5 4.0/5 "Great!"
    I think its nice to apply, it has been very fast and easy let's see what happens next if its open means I'll be very much happy person, pleas let me no soon that I can be a customer of this bank I had pan card permanent account number and I didn't have addar card though.
    Was this review helpful? 57
    , bangalore
    Reviewed on Oct 03, 2018
  • YES Bank Debit Card
    "SUPER BANK"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    I've been using the YES BANK Edge credit card for a while. The Value of the points are really good. I've already accumulated more than 15000 reward points. I am really impressed with the card and their services. I never had any issues with them.
    Was this review helpful? 43
    , hyderabad
    Reviewed on Sep 19, 2018
  • YES Bank Debit Card
    "What to write? You can write a review about any Loan produc"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    awesome great job i like your services i feel happy u provided help to need a urgent way tnq so much tnq bankbazar first time i am online visitor i cant explain how much i m happy bankbazar i would like too u say thnku bankbazaar your service is too much fast rapid
    Was this review helpful? 11
    , bangalore
    Reviewed on Mar 11, 2018
  • Kotak Debit Card
    "Good Bank"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I have a Kotak Bank i opened through Online portal. It is Very Easy to Open .Zero Rupees Charges.I ordered for a Debit card of kotak bank i got it delivered.Kotak App is Very User Friendly to Everyone.Zero balance maintain No Extra Charges..Quite Good App
    Was this review helpful? 62
    , bangalore
    Reviewed on Feb 16, 2018
  • Kotak Debit Card
    "Decent Credit Card"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I have a Salary account with them and the bank has offered a complimentary Credit card on the basis of this account. They have given me a Credit Limit of Rs.2.5 Lakhs, which I felt is quite a good one to have. One thing which let me down over here is their high interest rate. Also an added advantage is, they have good reward points system available with them.
    Was this review helpful? 28
    , chennai
    Reviewed on Jan 23, 2018
  • Kotak Debit Card
    "Good"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I am using domestic debit card of Kotak Mahindra Bank. The daily withdrawal limit was 25,000 rupees which was satisfactory. I am using this debit card for the last six months. There is no charge for other ATM swipe. ATM facilities are good and enough.
    Was this review helpful? 32
    , navi mumbai
    Reviewed on Jan 04, 2018
  • ICICI Bank Debit Card
    "Good"
    ICICI BANK
    0.5 4.0/5 "Great!"
    I have converted my reward points into cash many times. It was very good. I hold Platinum Visa debit card. The withdrawal limit is more than 1L which is really good. My debit card is linked with Payback account on every purchase I used to get lot of points.
    Was this review helpful? 32
    , bangalore
    Reviewed on Nov 16, 2017
  • ICICI Bank Debit Card
    "Good service"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    ICICI Bank provide good service. I m using it as my salary account frim 2012. Very minimal number of time I've visit bank for any support. Net banking service is really good and debit card most of the time I use it shopping or petrol bunk. Totally service is goods.
    Was this review helpful? 17
    , bangalore
    Reviewed on Nov 09, 2017
  • Kotak Debit Card
    "Good service"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    Within 4days of time I got the car loan from Kotak Mahindra bank. The customer support is good with Kotak mahindra bank. The rate of interest which they have offered was low, when compared with other banks. The required loan amount has been disbursed and I am happy with it.
    Was this review helpful? 23
    , hyderabad
    Reviewed on Oct 16, 2017
  • ICICI Bank Debit Card
    "Great banking service and good previlage"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have recently upgraded my debit card to CORAL and not sure about the type of card. I am happy with withdrawal limit. The customer service and response was quick. ATM service is more enough, even after 4 transaction there is no extra charges. The mobile application is good and they don't charge extra for IMPS transfer. Specialty of the card is One Plus One Ticket on movie.
    Was this review helpful? 11
    , bangalore
    Reviewed on Oct 14, 2017
  • ICICI Bank Debit Card
    "According to your use"
    ICICI BANK
    0.5 4.0/5 "Great!"
    My friend use icici coral debit card it charges 499 +gst every year it gives good offer like buy one get one free on movies per month and payback points and refund on petrol pump if used debit card for payment but i want to say after all this if you are doing this things then only use this card becuse 577 per year is too much if you are not using this benefits
    Was this review helpful? 9
    , pune
    Reviewed on Oct 04, 2017
  • RBL Bank Debit Card
    "Ratnakar Bank Debit card "
    RATNAKAR BANK
    0.5 5.0/5 "Blown Away!"
    Ratnakar Bank debit card facility is too good. Very useful options for using debit cards at different pos and online payment system. Bank customers care facilities are also prompt in service with customer. RBL is rising bank in all villages.
    Was this review helpful? 75
    , pune
    Reviewed on Aug 21, 2017
  • ICICI Bank Debit Card
    "Excellent Service"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I am using ICICI debit salary account for the past 3 years and the service from ICICI and executives of ICICI was very helpful and service was really nice and the transactions were very fast also I am getting my OTP pin very fast compare to others and they providing me a very excellent service.
    Was this review helpful? 6
    , bangalore
    Reviewed on Aug 21, 2017
  • Kotak Debit Card
    "Kotak Mahindra Bank Fraud Services"
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    Kotak Mahindra Bank has **fraud banking services**. Rs. 800+ charge for other ATM Withdraws. 10000+ Charge for not maintaining minimum balance. 1000+ for delayed credit card payments. One Purchase = Service Tax+Conversion Charge+Interest Charge+Actual MRPâ?¦. **Close all your accounts** of Kotak Mahindra Bankâ?¦
    Was this review helpful? 63
    , bangalore
    Reviewed on Apr 06, 2017
  • Kotak Debit Card
    "GOOD BANK BEST SERVICES GOOD JOB NICEBANK GOODRELATIONSHIP "
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    SUPPORTING WITH A MINIMUM WORKING TIME BANK QUICK DESISION WONDERFUL JOB GOOD PROVIDED BY OTHER BANKS LIKE ICICI, HDFC , IDBI , AXIS AND MORE NATIONALIZED BANKS FUTURE GOOD BANK MANAGMENT GOOD ALSO SUPPORT AND THANKS TO ALL THEY ARE HELPING PEOPLE THANK YOU AGAIN..
    Was this review helpful? 28
    , vadodara
    Reviewed on Mar 26, 2017
  • Kotak Debit Card
    "Share a experience with Kotak Mahindra Bank on line service"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I like Kotak Mahindra Bank because this bank replied fast comparing with another bank.The process was comleted process on line with in a five minute.its pleasant experience when compared with other bank services I like Kotak than another private sector banks.
    Was this review helpful? 30
    , ahmedabad
    Reviewed on Mar 25, 2017
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