Most of us have many savingsaccounts. And as a result we may sometimes forget about the savings account. On the other hand, your digital accounts may alsobe frozen due to various reasons. In this scenario, your savings bank accountcan either be deemed dormant or can be frozen.
Here, we explain how to reactivateyour dormant bank account or unfreeze your bank account.
What is a dormant or inactive account?
Your savings account will bedeemed as an inactive account, if there are no transactions in the account fora year. Interest credited from your savings or deduction of service charges bythe bank does not constitute as transactions. If the current scenario exceeds twoyears, then the savings bank account becomes a dormant account.
The bank makes your savings accountinactive for your security and to protect your savings account from fraudulentactivities.
It is easy to keep your savingsaccount active by doing small transactions. Transacting through cheques,depositing cash or through cash, depositing or withdrawing cash through theATM, transacting through internet banking etc. are some of the easy ways tokeep your account to active.
When you have an inactive ordormant savings account, you may not be able to perform many operations. Here aresome of the operations that are barred if you have an inactive account:
- Withdrawing cash or carrying other transactions throughan ATM or bank branch
- Transacting through netbanking
- Changing address
- Modifying signature
- Adding or deleting a joint account
Other than having your accountrendered inactive, your bank accounts can be frozen. While getting your bankaccount tagged as inactive is in your hands, the entire exercise of a frozenaccount lies at the hands of your bank.
What are the differences between a dormant account and frozen bank account?
A frozen account means that therecannot be any transaction until the account is unfreezed. Standing debitinstructions can’t take place when the account is frozen. Also, pending chequeswill be stalled till further notice. Not just cheque, no other forms of creditis allowed.
However, in case of an inactiveaccount, interest from your savings account is credited. If you don’t keep the required minimum averagebalance, the bank will also debit the penalty towards non maintenance of theminimum average balance.
How to reactive an inactive or dormant savings account?
If you want to use your savings bankaccount, you can look at activing your account. If the bank account does notserve any purpose and if you have already multiple accounts, then you can closeyour account. Closing your bank account will also save you from payingpenalties for non-maintenance of the minimum average balance and other charges.
Activating your inactive account isan easy task. All you have to do is make a transaction and your inactive accountwill be activated.
However, to activate your dormantaccount, you have to submit a written request for reactivation to your home bankbranch.
One of the easy ways to make surethat your account remains active is by carrying out at least one transaction ina year. Also, you can keep this accountfor your investments and set up systematic investment plans. In this respect,you can set up an auto debit request from your primary savings account to thelesser used savings account.
How to unfreeze your frozen savings account
Your bank account can be frozenfor various reasons. If you have a digital account, and you haven’t completedyour KYC process, then your account will be frozen after 12 months of openingthe account. The account can also befrozen if the PAN or form 60 is not updated.
If you have a digital savingsaccount, you will receive notifications stating that your account will befrozen. In this case, you should complete the full KYC process at the earliest.If your account is already frozen, in that case too, you will have to completethe full KYC process. You can contact on the bank’s toll free number or dropthem a mail to unfreeze your account. If you don’t want to continue with the account,then your deposited money will be refunded back to you.
Your digital savings account canalso be frozen, if the balance in the account exceeds Rs. 1 lakh or the totalamount of credit in a financial year exceeds Rs.2 lakh.
If your account is frozen due to non-updationof PAN card, to unfreeze, you should furnish PAN card /Form 60 to the bank. Youcan visit the nearest bank branch and fill up a form through which you canupdate your personal details. Also, submit a self-attested copy of PAN or Form60 to the bank. Also, it is better to carry the original PAN card. Original PANshould also be carried along at the time of submission
You can also carry the process throughnet banking. Click on the update PAN section. Input your PAN details and uploadthe PAN or form 60. Once uploaded, the process of unfreezing of your account willbegin.
Activating your dormant account or unfreezing your account may sound like hard work. Hence, to avoid it, you can close your account, make regular transactions, complete the KYC process and update your savings account with your PAN card.
Related Articles:
Want to Close Your Old/Unused Bank Account? Read this first
Why you should complete the KYC process of your online savings account?
Opened a digital bank account? Know the difference between Full KYC and e-KYC
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