Inactive Bank Accounts: What Happens to Your Money & Escheatment

Imagine you’ve got a stash of cash hidden under your mattress, but you forget all about it. Now, picture the state stepping in to take care of it for you. That’s essentially what happens with escheatment — when money in inactive accounts must be transferred to the state because it hasn’t been touched in a while.

Understanding escheatment

Escheatment occurs when your money or assets in an account are considered abandoned due to inactivity, typically after a period of three years. This can happen to accounts at banks, credit unions, investment firms, and other financial institutions. 

The state steps in to take custody of these funds to ensure that lost or forgotten money can eventually be claimed by its rightful owner. However, retrieving escheated funds can be a time-consuming process, so it’s best to manage your accounts proactively to avoid this situation altogether.

How to keep your accounts active & avoid escheatment

Inactivity isn’t just about forgetting a hidden stash of cash — it can happen with any account you don’t regularly use, whether it’s a savings account, a checking account, or even an investment account.

If your account becomes inactive, it might incur fees from the financial institution, which can gradually reduce your balance over time. Ultimately, if no activity occurs, the funds could be escheated to the state.

To prevent this from happening, it’s important to:

• Regularly use your accounts: Make deposits, withdrawals, or even minor transactions to keep your accounts active.
• Update contact information: Ensure your financial institution has your current address, phone number, and email so they can reach you if needed.
• Review your accounts periodically: Even if you don’t use certain accounts often, check in on them occasionally to ensure everything is in order.

Steps to recover escheated funds

If your account has already been escheated, don’t worry—you can still recover your money by filing a claim with the state. This process typically involves providing proof of ownership, but it may take some time to resolve. The key to avoiding this hassle is to stay informed and engaged with all your financial accounts.

Who is affected by escheatment laws?

Escheatment isn’t limited to any one type of financial institution; it’s a legal requirement that applies across the board. Whether you have accounts with a bank, a credit union, or another type of financial entity, the same rules apply. Understanding what escheatment is and the importance of keeping your accounts active can help you protect your assets from being handed over to the state.

How Arizona Financial helps you stay protected

At Arizona Financial Credit Union, we take proactive steps to help our members avoid escheatment:

• Member communication: We regularly contact members with inactive accounts to remind them to take action.
• Educational resources: We offer guidance on managing accounts effectively to help prevent inactivity and escheatment.
• Account monitoring tools: Through our online banking and mobile app, you can easily monitor and manage your accounts to ensure they remain active.

Stay engaged, stay protected

By staying vigilant with your financial accounts, you can ensure your money remains in your hands. Regular account activity, up-to-date contact information, and proactive management are essential steps to avoid escheatment.

For more information on managing your accounts and preventing escheatment, visit Arizona Financial Credit Union or contact our Member Services team to learn more about keeping your accounts active.