Bank of America isn’t the only bank making headlines with its latest announcement about inactive accounts. In fact, financial institutions across the country are tightening policies on inactive or abandoned accounts. If you haven’t been keeping an eye on your account lately, this could affect you, so here’s what you need to know.
What’s Happening?
Many banks, including Bank of America, are warning customers that their accounts could be closed or locked if there’s no activity for a long period. Typically, that is around three years of abandonment. When an account goes inactive, the bank is required by state law to notify the account holder. If no action is taken, the funds may be transferred to the state’s custody as “unclaimed property.” That means your money could be held by the state until you claim it.
It’s Not Just Bank of America
While Bank of America is the most recent to make this announcement, this is not just a Bank of America issue. Other major banks like Chase, Wells Fargo, and even local banks across the Tri-States must comply with similar state regulations. If you don’t stay active with your account, the same thing could happen to your funds, no matter where you bank. If your funds are simply held in a piggy bank, no worries.
Why Does This Happen?
The rules surrounding unclaimed assets (like inactive bank accounts) are set by each state to prevent banks from holding onto forgotten or unused money. Each state has its own time frame for when an account is considered “abandoned,” and most have laws that require banks to turn over abandoned funds to the state. So, whether you’re in Iowa, Illinois, or Wisconsin, the laws are in place to protect residents’ money, but also to ensure that it doesn’t stay in limbo forever. Rules for each state can be found below:
Illinois Unclaimed Property or Escheatment Laws…