Opening multiple bank accounts is easily done. For example, there are times that we want to take advantage of a savings account rate. Sometimes there may be a reason to open another current account, maybe to keep cash amounts separate from one another. For example, it is typical for a married couple to have three accounts - one for each individual and one for joint expenses.
One consequence of opening multiple bank accounts, regardless of why, is that it becomes more challenging to keep track of them accurately. It is far more common than you might think for bank accounts to be ‘lost’ by an account holder. It either becomes forgotten about, or an account holder misplaces all the details surrounding it are.
What is a dormant bank account?
A dormant bank account is an account held at a bank, building society or similar financial institution that has not been touched for several years. Different providers have different timelines, but if they have not been able to contact you for anything between one to fifteen years, an account can be classed as dormant.
A bank account becomes dormant if a bank has tried to contact you through the mail. If that mail is then sent back to them undelivered, they will register your account as dormant. If they do not have a record of your change of address when this occurs, they have to change the account's status to dormant to protect against fraud. If they keep sending your account details to an old address, there is potential for identity theft if you are not there to receive it.
Additionally, if an account has had no activity on it for a particular time frame, a bank will change the status to dormant, too. While that can be as long as fifteen years, it is often much lower. For example, three years is the standard timeframe for savings accounts. Current accounts may turn dormant if any of the above criteria are hit after just one year.
When an account has been registered as dormant, the bank will then cease contacting you. Nothing else happens on the account, and the bank does not try other means to locate you. If you want to access the funds within a dormant bank account, it is up to you to track it down and contact the bank about changing its status to active. The bank will reopen your account, and you can withdraw funds and use the account as you wish.
What is a lost bank account?
A lost bank account is slightly different to a dormant bank account. While a lost bank account could well be dormant, it denotes an account that a person is sure exists, but is unsure of any of the details. The reality of the situation is that the account is likely to have gone dormant in the time it has taken for a person to remember that such an account may exist.
Like a dormant bank account, when a bank account is lost, it is up to the account holder to reopen it proactively. That means contacting the bank with all the relevant details to change its status back to active (presuming it has been allocated as dormant).
How to find lost bank and savings accounts
It can be quite daunting thinking about how to track down a lost bank account or savings account. We all know that getting information out of banks about ourselves is often challenging, even if we know all the answers to their security questions! If you know that one provider does have an account of yours, but you have lost all the relevant details, you can try calling them in the first instance. Do try to have as much information as you can on hand, though - even your name or the branch you opened the account can be helpful.
All that said, when an account gets lost or goes dormant, it often becomes so because we no longer have the relevant information about them. So given that you do not have information like a bank account number to hand, how do you go about finding accounts - dormant, lost or otherwise?
Thankfully, there is now a straightforward way to do so in the UK, a service called My Lost Account. When you complete the online form, the service searches accounts at banks and building societies for you within three months. When searching any possible NS&I accounts, the results will be back within just a month. All this is done at no cost.
It is a fantastic service and does take a lot of the sting out of looking for lost accounts - even though the results are not immediate. In the meantime, if you are that desperate to know the results, it can be helpful to go through any paperwork you have with a fine-tooth comb. Of course, this is prone to error, but you might find some information on what you thought was a scrap of paper.
If you are happy to wait and use the service, it is good to have the following information ready if possible. Providing the most information possible gives you a far higher chance of having an account found by the service for you. Helpful details are:
- When you opened the account
- When you last used the account
- How much money you think it holds
- What type of account it is
- The branch where you opened it
- Sort code and account number
If you do not want to use the service online, you can also pick up and submit a paper form to a bank or building society.
If the service does find you some lost accounts, it will contact you with the details it has unearthed. The service also tells you how to claim any funds present. Remember, you may have earned some interest in the time since you last used the account, so be sure that is there, too. In all instances, you will have to give some form of identification to prove who you are if you want to withdraw funds.
Why you should find lost or dormant bank accounts
Finding lost or dormant bank accounts is vital for ensuring your financial health is as good as it could be. If you have bank accounts you do not know about, they can affect your overall personal finances. An account could hold a substantial amount of money, which you could use to improve your lifestyle or pay off debts.
The likelihood that you have an account with thousands in it is unlikely - though it is not uncommon either. However, another impact that a lost or dormant account can have on your financial health is in terms of your credit report. Credit companies will go through your financial background with a fine-tooth comb. So should you want a new credit card or a mortgage, if they unearth an account with a negative balance, that could act as a mark against your name, without your knowledge. Finding accounts is a good way of ensuring that they're all in the black!
Finding lost and dormant accounts
Finding a lost and dormant bank account is far easier than it may seem. A system has been set up to ensure that finding dormant accounts is straightforward and not plagued with bureaucracy. That said, not every person at every bank will be as helpful as possible when assisting you in finding your accounts. If you ever come across this, remember that you can report the bank to the Financial Ombudsman Service. Doing so is the only way to improve the process in future for other people. The Financial Ombudsman Service even has the ability to fine a bank if they do not let you reclaim your funds in a timely manner should you locate an account. They can also order a bank to pay interest on the latest balance at 8%, charged from when you first asked to withdraw funds. Complaining literally can pay!