If you do not do transactions with your bank account for a very long time, then it gets closed automatically. And you can neither withdraw any money from the closed account nor can you deposit any money in it. Can’t even ask for money from anyone in that account.
The difficulty becomes more when, if you have linked that bank account to any of your savings schemes. Or have the same account number registered in the PF fund. Because, in a closed account, there is no money transfer of any such scheme or fund. In such a situation, it is better that you get your account activated again.
In this article, we will learn how to activate a closed bank account? How to activate your inactive/dormant account in SBI, PNB, or ICICI Bank?.
Why do Bank accounts become closed or dormant?
If you do not do any financial transaction with your bank account continuously for 1 year, then that account is put in the category of inactive account. You can make an inactive account active again by doing a transaction.
But, if you have not done any financial transaction with your bank account for 2 consecutive years, then your bank account is put in the category of dormant account. In banking parlance, it is called a dormant account, which is colloquially called a closed account.
This rule is applicable in respect of both Savings Accounts and Current Accounts. The account closed in this way cannot be made operational by transacting. How can I activate it? We have given this information in the next paragraph.
Why does a bank deactivate or close an account?
Accounts lying inactive or dormant for a long time can be used for fraud. To eliminate any such apprehension, the bank does this with accounts that are not in use for a long time. Banks also instruct their employees to be extra cautious on new transactions in any such account.
How to activate your inactive account?
You have two ways to get your inactive bank account activated again-
Make a new transaction from your account
You can do transactions from your bank account in any one of these ways-
- Deposit or withdraw money in your account by visiting a bank branch
- Deposit or withdraw money in your account via check
- You can deposit or withdraw money from an ATM machine
- Can do any transaction through internet banking or mobile banking
- Can make any payment through ECS or EFT
Send a request to your bank
Even if you do not do any new transactions, you can get your bank account activated again by contacting the bank. For this, you have the following methods-
- Apply to Bank Officer: You can directly contact the branch of that bank and apply to restart your account.
- Take Help of Customer Care: All major banks have customer care numbers. By talking to them, you can get your account activated again.
- Through Internet Banking: Login to the bank account with the help of your username and password. Here you can use the option to activate the account in the service request section.
How to activate a closed/dormant bank account?
If your bank account has been put in the Dormant Account category, ie the account has been closed, then you cannot make it active by doing any kind of transaction. Because neither money is deposited in the Dormant Account nor can any money be withdrawn from it.
To get the Dormant Account back on, you have to go to the bank and give a written application. Along with this, KYC documents (documents related to photo and identity and proof) also have to be submitted afresh. We have told in a separate article how to write an application to activate a closed bank account. To know this see: How to write a closed account activation application? But, let us tell you about the KYC documents that are attached with the application. These are-
- identity proof As an identity proof, you can submit any photocopy of the valid document containing the photo. Such as Aadhar Card, Ration Card, Driving License, Passport, etc.
- address proof As an address proof, you can submit a photocopy of any valid document in which your address is entered, such as Aadhar Card, Ration Card, Driving License, Passport, Bank Passbook, Electricity Bill, Water Bill, landline bill, etc.
There is no charge on account activation again
To reactivate the bank account, the bank does not charge any fee. If money is already lying in that account, then that too does not end (Laps). Once the account is active again, you can remove it whenever you want. There is also a ban on deducting penalties for not having a minimum balance in closed dormant accounts.
Bank will inform about the deactivation or closure of the account
The bank will inform you before your bank account is classified as a dormant or dormant account. This information must be given at least 3 months in advance. Along with the information, the process of re-activation should also be explained. The bank will send this information to your mobile and email ID as well.
- Once the notice is sent by the bank, you will have to reply to it. Your bank account will continue to function as an active account for the next year if you provide a valid reason for your account being inactive.
- Even if you have not done any transaction during the extended period of time by the bank, then your account will be put in the category of dormant account.
- But, even if your account is in the category of a dormant account, the interest on the money deposited in your account will continue to go there. SMS charges or other service charges will also continue to be deducted as before.
What to do to avoid the account being inactive?
- Close a bank account that you do not need on your own. You can do this work by going to the bank and giving the application. If there is a possibility of needing that account sometime in the future, then pay attention, and keep depositing or withdrawing some money every year. If you do any financial transaction with your account once in 2 years, then your account will not be closed.
- If you invest money in any kind of investment scheme, such as SIP, mutual funds, shares, insurance, etc., then link their installments or dividends or bonus, etc. to that bank account.
- If you have multiple bank accounts, then link different bank accounts for the payment of different types of bills. By doing this you can also avoid the deactivation or closure of multiple accounts.
Difference between financial transactions and non-financial transactions
By now you must have understood that the reason for the inactivity or closure of a bank account is considered to be non-transactional in it for a long time. But, what is this financial transaction, let us know. Also, let us understand what is the difference between a financial transaction and a non-financial transaction?
What is considered financial transactions? What are Financial Transactions
With respect to a bank account, a non-financial transaction is a transaction that affects the balance in your account. This means that money has either been deposited in your account or withdrawn. Whether these acts are done in the hands of the account holder or any other person, deposit or withdrawal in any way is counted in the category of financial transaction only.
The transactions that fall under the category of financial transactions in the bank account are-
- Cash withdrawal | withdraw money from a bank account
- Cash deposit | deposit money in a bank account
- Funds transfer | Transfer money to another account
- Transactions of money through NEFT, RTGS, UPI, etc.
- Recharge, Billing, Shopping, or any other payment method
Deposit of interest This deduction of service charge is not a financial transaction: But deposit of interest or deduction of service charge or deduction of penalty for non-maintenance of minimum balance, etc., do not come under the category of financial transaction, because in this the relation of any account holder or other person. does not happen. Rather, these are procedures done on behalf of the bank and are not considered as financial transactions in relation to a bank account.
What are considered non-financial transactions? What are Non Financial transactions?
Non-Financial Transactions are called transactions, in which the balance in your account does not matter. That is, money neither comes nor goes in the account. This does not make any difference to your account amount.
For example, checking balance comes in the non-financial transactions (Non-Financial transactions) because there is no money transaction in it. Similarly, emails or messages, or instructions sent by the customer to the bank also come under the category of Non-Financial Transactions.
In the language of banking, these activities are kept in the category of non-financial transactions-
- Balance Inquiry: check bank account balance
- Updating a customer’s details: Make changes in your personal details entered in the bank account such as changing the mobile number, email, address, etc.
- Account opening or Account closing: account opening or closing
- Printing an account statement: Check your account statement or transaction record
- Standing instructions maintenance: Providing account instructions or messages on behalf of the customer
- Sweeping/sweep out instructions maintenance: Sweeping or sweep out instructions (by adopting the sweep out system, the excess balance is automatically transferred to the FD when the balance exceeds a limit. The FD amount is automatically converted into the savings account as soon as the balance below the limit is reached)
- ATM Card, Cheque book issuance: Issuance of ATM card, checkbook, etc. for that account.
Accrual of interest also comes in non-financial transactions: If the interest earned on deposits in your bank account is deposited, then the balance of your bank account increases. Yet it is not considered a financial transaction. It is considered in the category of non-financial transactions. Similarly, deducting service charges from the bank or deducting the minimum balance penalty also comes in non-financial transactions. We have explained the reason for this above.