The terms "inactive account" and "dormant account" refer to the status of personal and corporate bank accounts (for those dealing with SME banking in Sri Lanka) that have not been used for a certain period, but they have distinct meanings:
Inactive Account:
· Definition: An inactive account is one that has not had any transactions or activity (like deposits, withdrawals, or transfers) for a specified period, often a year or more, depending on the bank’s policies. This does not however apply to the best children’s savings accounts in Sri Lanka, since children are not allowed to withdraw money from these accounts until they are of a certain age.
· Characteristics: The account is still open, and the account holder can still perform transactions. The account might be considered inactive due to lack of use, but it remains operational.
· Fees: Some banks might charge maintenance fees on inactive accounts or require a minimum balance to avoid fees.
Dormant Account:
· Definition: A dormant account is one that has been inactive for a longer period, typically several years. The specific timeframe can vary by bank and jurisdiction.
· Characteristics: The account is considered dormant when it has had no activity for an extended period, and often, the bank might take additional measures to maintain or close the account. Banks may have specific procedures for reactivating a dormant account.
· Fees: Banks may charge additional fees for maintaining a dormant account or may transfer the funds to a state unclaimed property fund if the account remains dormant for too long.
Key Differences:
· Time Period: Inactivity usually refers to a shorter period (often 1 year), while dormancy applies to a longer period (several years).
· Account Status: Inactive accounts remain operational, while dormant accounts might be subject to stricter regulations and could be flagged for closure or transfer to unclaimed property.
· Bank Actions: Banks may take different actions for inactive and dormant accounts, including fees, notifications, or legal requirements for handling. Even though savings account interest rates in Sri Lanka apply to savings accounts, these may not be paid if the account is dormant.
In both cases, it is a good idea to contact your bank if you find your account has become inactive or dormant, especially if you wish to prevent any issues or reactivate the account.
How to reactivate an inactive account in Sri Lanka
To reactivate an inactive bank account in Sri Lanka, follow these general steps:
1. Contact the Bank
· Visit the Branch: Go to the branch where your account is held. It is often the most effective way to address the situation in person.
· Customer Service: Alternatively, you can call the bank’s customer service hotline for initial guidance.
2. Provide Identification
· Documents: You will need to present valid identification. This usually includes a National Identity Card (NIC) or passport. Some banks might also require proof of address or additional documents.
3. Request Reactivation
· Submit a Request: Fill out any required forms or submit a written request to reactivate your account. The bank may have specific forms for this purpose.
4. Update Information
· Verify Details: Ensure that your personal details, such as contact information and address, are up-to-date in the bank’s records.
5. Address Any Fees
· Pay Fees: Be prepared to pay any fees associated with reactivation or past maintenance charges if applicable.
6. Follow Up
· Confirmation: Confirm with the bank that your account has been reactivated and is fully operational. Ask about any further steps you need to take.
7. Monitor the Account
· Check Activity: Once reactivated, keep an eye on your account activity to ensure there are no issues or further inactivity.
Different banks may have slightly different procedures, so it is always a good idea to check with your specific bank for detailed instructions.
How to reactivate a dormant account in Sri Lanka
Reactivating a dormant account in Sri Lanka generally involves a few additional steps compared to reactivating an inactive account due to the extended period of inactivity. Here is a guide to help you through the process:
1. Visit the Bank Branch
· Personal Visit: Go to the branch where the account was opened. It is typically required to handle such matters in person.
2. Provide Required Identification
· Documentation: Bring valid identification, such as your National Identity Card (NIC) or passport. You might also need proof of address or other documents, depending on the bank’s requirements.
3. Submit a Request for Reactivation
· Application Form: Fill out any forms provided by the bank to request reactivation of the dormant account. Some banks may have specific forms for this purpose.
4. Clear Any Outstanding Issues
· Fees and Charges: Pay any fees or charges that may have accumulated during the dormant period. Some banks may also require payment for any past maintenance fees.
5. Verify Account Details
· Update Information: Ensure that your personal information and contact details are current in the bank’s records. This might involve updating your address, phone number, or email.
6. Provide Additional Information
· Supporting Documents: The bank might request additional documents or information to verify your identity and ownership of the account.
7. Await Confirmation
· Approval: Once you have submitted all required documents and requests, the bank will process the reactivation. Follow up to ensure that your account is reactivated and operational.
8. Monitor the Account
· Check Activity: After reactivation, monitor your account regularly to ensure there are no issues and to avoid future dormancy.
Pro tip: If the account has been dormant for a very long time, the bank might have transferred the funds to a state unclaimed property fund. In such cases, you might need to follow additional procedures to claim your funds, which could involve contacting the relevant government authorities or departments.
It is a good idea to check with your specific bank for any particular procedures or requirements they may have for reactivating a dormant account.
