Bank of America has recently announced that it will be closing accounts deemed “abandoned” due to prolonged inactivity. This move aligns with state escheatment laws, which require financial institutions to transfer unclaimed funds to state custody after a certain period. If you are a Bank of America customer, it is essential to understand what this means and how you can prevent your account from being affected.
Who is at risk of account closure
Bank of America considers an account abandoned if there has been no activity for an extended period, typically three years or more. This includes various types of accounts and financial instruments, such as:
- Checking and savings accounts
- Individual Retirement Accounts (IRAs)
- Certificates of Deposit (CDs)
- Uncashed cashier’s checks
- Stocks and securities
- Safe deposit boxes
If your account falls into any of these categories and has been inactive for three years or more, it may be at risk of being classified as abandoned.
What is escheatment and how does it affect you
Escheatment is the process by which unclaimed or abandoned property is transferred from a private entity, like a bank, to the state. Each state has its own escheatment laws that dictate when and how this transfer occurs. For Bank of America customers, if an account is deemed abandoned, the bank is required to hand over the funds to the appropriate state agency for custodial safekeeping. Once your funds are transferred to the state, reclaiming them can be a complex and time-consuming process. It often involves providing proof of ownership and navigating state-specific procedures. Therefore, it is in your best interest to prevent your account from reaching this stage.
Steps to prevent your account from being classified as abandoned
To ensure your account remains active and to avoid the complications associated with escheatment, consider the following actions:
- Regularly access your account: Log in to your online banking or mobile app periodically to check your balances and review transactions.
- Conduct transactions: Performing transactions, no matter how small, can demonstrate account activity. This includes deposits, withdrawals, or transfers between accounts.
- Set up direct deposits or automatic payments: Establishing recurring transactions can help maintain regular activity in your account.
- Keep your contact information updated: Ensure that your address, phone number, and email are current so that you receive any notifications from the bank regarding your account status.
- Respond promptly to bank communications: If you receive a notice from Bank of America about potential account inactivity, follow the instructions provided to confirm your intent to keep the account active.
What to do if you receive an abandoned property notification
If Bank of America identifies your account as potentially abandoned, they will send you a notification letter. This letter will inform you of the inactivity and provide instructions on how to prevent your account from being turned over to the state. It is crucial to respond to this notice promptly by contacting the bank and performing any necessary actions to reactivate your account.
Understanding state-specific escheatment laws
Escheatment laws vary by state, meaning the period of inactivity before an account is considered abandoned and the process for reclaiming funds can differ depending on where you live. Familiarize yourself with your state’s specific regulations to better understand your rights and responsibilities. This information is typically available on your state’s official website or through its unclaimed property division.
Importance of digital banking in maintaining account activity
With the increasing shift towards digital banking, it has become more convenient to manage and monitor your accounts. Utilizing online banking services allows you to:
- Set up account alerts for low balances, deposits, and upcoming payments
- Schedule recurring bill payments
- Deposit checks using mobile deposit features
By actively engaging with these digital tools, you can ensure regular account activity and reduce the risk of your account being classified as abandoned.
