Dormant Deposit: Don’t let your money nap! Discover why keeping your savings account active is a smart financial move.
When it comes to managing your finances, there’s one thing you absolutely shouldn’t do – let your bank account sit idle. You might be asking, “What’s the big deal?” Let’s dive into why it’s important to keep your account active.
When you let your bank account sit idle, you’re essentially letting your hard-earned cash take a long, uninterrupted nap. While a good night’s sleep may sound appealing to you, your bank account isn’t exactly enjoying the rest. Here’s why:
Admin Fees can creep up
As with any guest who overstays their welcome, sleeping charges can start piling up in your bank account if you leave it untouched for too long. These fees can eat away at your savings without you even realizing it. That’s money you could have used for a nice meal with your dogs or a cup of coffee.
Banks may only impose dormancy fee on a dormant deposit account five (5) years after the last activity, provided that the account balance falls below the required minimum average daily balance (ADB).
Dormant Deposit /Unclaimed funds can cause headaches
If your account remains inactive for an extended period of time, the bank may classify it as “unclaimed”. This can lead to a lengthy process of reactivating your account and verifying your identity.
The worst thing is that the bank might endorse the funds to Bangko Sentral ng Pilipinas (BSP) as the law requires them to do so. Savings Accounts that remain dormant for ten (10) years will be escheated in favor of the government under the Unclaimed Balance Law (Act No. 3936).
Who wants to deal with paperwork and bureaucracy, right?
Missed opportunities for growth
When your money sits idle in an inactive account, it misses the chance to grow. Banks offer a variety of savings and investment products that can help your money work for you. By keeping your account active, you can take advantage of these opportunities and watch your wealth grow over time.
Easy access to emergency funds
Life can surprise us and sometimes extraordinary events happen. Whether it’s sudden medical expenses or an urgent repair to your home, an active bank account ensures you have quick access to the funds you need during emergencies.
How to keep your bank account active
Dormant Deposit / Now you might be thinking, “How do I keep my bank account active?” It’s easier than you might imagine:
1. Make small transactions
Even a small deposit or withdrawal every few months can keep your account from sitting idle. You can use your account for everyday expenses.
2. Set up automatic payments
If you need to pay bills or maintain subscriptions, consider setting up automatic payments from your bank account. This not only keeps your account active but also ensures that your financial obligations are met on time.
3. Dormant Deposit / Monitor your account regularly
Keep an eye on your account statements, even if it’s just a quick glance. This will help you spot any unauthorized transactions and keep you in touch with your financial health.
4. Stay connected with your bank
Contact your bank if you plan to be away for an extended period of time or if you are experiencing problems with your account. They can provide guidance on how to keep it active.
Your bank account is like a well-tended garden. Regular attention and care can help it flourish, while neglect can lead to unintended consequences. So don’t let your money fall by the wayside – keep it active, growing and ready to serve your financial needs. Having a dormant deposit is not the way to go.