America’s banks are slowly vanishing

What Happens to Inactive Bank Accounts?

America’s banks are slowly vanishing

Having a bank account go dormant may commonly be thought of as a rare occurrence, but it happens to many banking customers.

Some tend to forget about them. Others simply don’t use them on a regular basis.

Often, a family member dies and passes down a bank account without the heir knowing it.

Whatever the reason may be for an account to fall dormant, nobody wants to see their money disappear.

While the money still technically belongs to the customer, it becomes a hassle to get the money back from the state (where inactive account balances are sent to).

What happens to inactive bank accounts?

If service fees haven’t already drained the balance on the account, an inactive bank account is turned over to the state treasury, where the owner must go in order to retrieve their funds.

Where Does the Money Go?

Here’s a typical outline of what happens to a dormant bank account:

1. The account is dormant for a specific period of time

Generally, a time frame of 3 to 5 years with no customer-initiated activity sends an account into dormancy.

Activity that will help to avoid an inactive account usually includes:

  • Depositing or withdrawing funds
  • Confirming an active account with the bank (may require filling out a form)
  • Written correspondence to the bank regarding your account

The amount of time that must lapse depends on the state in which the bank account was opened.

2. An attempt is made to contact the account holder

Before sending the account to the state, the bank must try to notify the account holder.

If the customer does not respond within a certain amount of time, the balance on the account will be turned over to the state.

3. The bank turns the account over to the state

In a process what is called “escheating” an account, banks are required to turn over funds from the inactive account to the state treasury.

Once the account is sent to the state, the funds are held as unclaimed property.

To reclaim your money, you will have to contact your state for the instructions on how to get your money back.

You’ll need to complete and submit a claim form along with the necessary identification.

If you happen to have unclaimed property held by the state, you can begin the retrieval process by visiting

1. Review your bank accounts regularly

By doing this, you can identify which accounts to close to becoming officially inactive.

Shift the funds to another account to make it less of a worry. To make this easier, use money management software.

2. Create account activity with automatic transfers and scheduled payments

With automated transactions, keeping your account active should not be a problem.

You can set up an automatic transfer of a small amount into your savings account or make monthly bill payments from your checking account.

3. Keep your address and contact information updated on your bank accounts

If you keep your address up-to-date, you’ll be less ly to miss the final notification before an account is turned over to the state.

If you allow the state to escheat an account, it could take months or even years to reclaim your funds.

Watch Out for Fees

Depending on the account and the bank, your account may be hit with a dormant account fee.

The dormant account fee is charged after a specific period of time with no customer account activity. Usually, this time period ranges from 6 to 12 months.

The fee is charged for every month that the account is inactive — until the point where the bank determines that it is time to turn the account over to the state treasury.

What are the dormant account fees charged by the biggest U.S. banks?

BankDormant account fee
Bank of AmericaNone
Wells FargoNone
U.S. Bank$5 per month (after four consecutive months of inactivity)
Capital OneNone (escheatment after 24 months of inactivity)
SunTrust$15 per month (after 12 months of inactivity) (only applies to Florida accounts)
TD BankNone
PNC Bank$20 upon escheatment (only applies to Philadelphia accounts)
Santander$50 upon escheatment (after 12 months of inactivity)
Fifth Third Bank$5 per month (after 395 calendar days of inactivity) (only applies to accounts with balances of less than $100)
Union BankNone
Citizen's Bank$10 per month (after 12 months of inactivity); $5 per month thereafter (12 months for checking or 24 months for savings; $50 escheatment fee (after 24 months)
BBVA Compass$5 per month (after 12 months of inactivity)
BMO HarrisNone (escheatment after 36 months of inactivity)

Simon Zhen is the senior research analyst for MyBankTracker. He is an expert on consumer banking products, bank innovations, and financial technology.

Simon has contributed and/or been quoted in major publications and outlets including Consumer Reports, American Banker, Yahoo Finance, U.S. News – World Report, The Huffington Post, Business Insider, Lifehacker, and


America’s banks are slowly vanishing

New technology may mean fewer reasons to go into a bank.

But even though simple transactions can be conducted online or using a mobile app, the number of branches in the U.S. has only seen a slight decline, according to Bankrate’s analysis of Federal Deposit Insurance Corp. (FDIC) data as of Sept. 10. This includes branches and main offices.

Wells Fargo is still the bank with the most branches in the U.S. In fact, about 6 percent of bank branches in America are Wells Fargo branches.

It has hundreds more branches than Chase and nearly 1,200 more than Bank of America. Wells Fargo also has the most branches in nine states and Washington, D.C.

Here’s a look at the bank that has the most locations in each state, and the nation’s capital.

The data shows the 15 largest banks account for around 37 percent of all locations.

Overall, San Francisco-based Wells Fargo has about 5,400 full-service branches, according to the FDIC data analyzed by Bankrate.

JPMorgan Chase isn’t far behind with about 5,000 full-service branches nationwide. The bank headquartered in New York has the second most branches in the U.S., including the most in six states.

Overall, the number of Wells Fargo branches declined 2.86 percent from June 30, 2020 compared with a year earlier. Meanwhile, the total number of bank branches/offices in the U.S. declined around 1.6 percent over the same time period.

The merger of equals of BB&T and SunTrust to become Truist wasn’t completed until December 2019. So, Truist wasn’t included in last year’s Bankrate study.

BB&T had the most branches in North Carolina and Virginia in 2019, and retained both titles as Truist this year.

Here’s a look at banks that changed top ranks in certain states:

  • Truist replaced Wells Fargo in Florida.
  • Truist replaced Wells Fargo in Georgia.
  • Truist replaced PNC in Maryland.
  • Trustmark National Bank replaced Regions Bank in Mississippi.
  • TD Bank replaced Citizens Bank in New Hampshire.
  • Wells Fargo replaced PNC in New Jersey.
  • Bancfirst replaced Arvest Bank in Oklahoma.

Branches are slowly disappearing

Some experts predict bank branches are heading for extinction. Indeed, there has been a consistent net loss of locations operated by financial institutions for the last several years. Since there are fewer in-bank transactions, there are also fewer tellers.

New players in the space such as Ally Bank have sprung up without any physical locations for customers to transact. Other institutional players have spun out online-only subsidiaries such as Citizens Access, HSBC Direct, Investors eAccess, Marcus by Goldman Sachs and Popular Direct from Popular Bank.

Online banking customers deposit checks by snapping a picture, get their cash at ATMs and open new accounts from their phone or computer. And without having to pay to operate physical locations, online banks are often able to offer higher interest rates and lower fees on deposit accounts than their traditional competitors.

“Banking online-only is certainly feasible most of the time for many consumers,” says Greg McBride, CFA, Bankrate chief financial analyst. “But the occasional need for a safe deposit box, a signature guarantee, a cashier’s check or just making a large cash deposit are a lot easier if you have access to a local branch.”

You can have accounts with both online-only and traditional financial institutions and easily transfer funds between the two, McBride says.

“Different consumers value different attributes. Aspects a large branch network, a national or regional presence, broad product lineup, and convenience will carry different levels of importance depending on your individual needs and circumstances,” he says.

JPMorgan Chase vs. Wells Fargo

Wells Fargo still leads Chase for the most branches, even though it has around 159 fewer branches as of June 30, 2020, compared with a year earlier. But Chase’s total of branches only decreased by around 45 during that one year period.

“Branches continue to play an important role in the way we serve our customers, but as customer preferences change, so will our branches and the experiences customers have in them,” says a Wells Fargo spokesperson.

“We are expecting it [the pandemic] to accelerate branch consolidations,” says Brandon Larson, executive vice president at fintech firm Novantas.

Larson says there are a couple of factors going into that.

  • A down rate environment that puts more pressure on cost saving as banks try and find ways to reduce expenses.
  • Changing channel preferences: People are becoming more digital. That has been accelerated through COVID-19, but was going on well in advance of the pandemic as well.

“More consolidation is expected across the industry, for sure,” Larson says.

Larson says Novantas saw some people go from using technology a little bit to a lot.

“Some of the smaller banks did see increased adoptions of digital capabilities,” Larson says. “Larger banks had kind of mixed results on that front. But everybody saw increased utilization.”

Wells Fargo and JPMorgan are certainly trying to create seamless omnichannel experiences by balancing out their large brick-and-mortar presences with growing suites of digital offerings.

Wells Fargo is on pace to fall behind JPMorgan Chase Bank as the No. 1 operator of bank branches. Although both financial institutions consolidated their locations in recent years, Wells Fargo is shrinking at a faster pace than its closest competitor.

Chase has expanded its presence, according to FDIC data. As of June 30, 2019 the bank was in 29 states. A year later it’s in 39 states.

JPMorgan’s consumer and community banking serves roughly 63 million U.S. households, according to its 2019 annual report. Wells Fargo boasts serving one in three households in the United States.

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Note: Adrian Garcia contributed to a previous version of this story.


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