Bank of America warns it may cancel accounts that aren’t active 2025

Bank of America

Bank of America Warns It May Cancel Accounts That Aren’t Active

Bank of America, one of the largest and most influential banks in the United States, recently warned its customers about the potential cancellation of accounts that remain inactive for extended periods. This move has sparked concern among many individuals, particularly those who may not be aware of the impact inactivity can have on their accounts. In this article, we will explore why Bank of America may close inactive accounts, the types of accounts that are affected, and how customers can avoid the consequences of account closure.

The Importance of Account Activity

What is Considered Inactive?

For Bank of America, an account is considered inactive if there has been no customer-initiated activity—such as deposits, withdrawals, or transfers—for an extended period. The exact length of inactivity required for account closure varies depending on the type of account and the state laws that govern escheatment, the process of transferring abandoned property to state custody.

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In the case of Bank of America, an account typically becomes inactive after three years of no activity. Once an account is labeled as inactive, the bank has the legal right to close it and potentially transfer the funds to the state. This measure is primarily designed to comply with state regulations and prevent the bank from holding onto unclaimed assets indefinitely.

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Why Inactivity Is a Concern for Banks

The primary reason banks monitor account activity is to comply with state laws on unclaimed property. These laws are designed to protect consumers and ensure that funds are properly managed and accessible to their rightful owners. If a customer does not interact with their account for an extended period, the bank must turn over the funds to the state. This process is known as escheatment, and it can be complicated for customers to reclaim their funds once they have been transferred to state custody.

In some cases, the bank may charge fees or impose penalties for accounts that remain inactive for long periods. These fees can accumulate over time, ultimately reducing the balance in the account to zero. The bank then takes further steps to close the account and transfer the remaining balance to the state.

Types of Accounts Affected by Inactivity

Bank of America has a variety of account types that could be subject to closure if left inactive. Below are some of the main accounts that may be affected by the inactivity policy:

1. Checking Accounts

Checking accounts are used for everyday transactions such as deposits, withdrawals, and bill payments. These accounts are often the most at risk of being closed due to inactivity because they tend to be used more frequently. If there are no transactions for several years, the account may be considered dormant, and Bank of America may proceed with closure.

2. Savings Accounts

Savings accounts, like checking accounts, can also be closed if there has been no customer activity for a significant period. These accounts often have fewer transactions, but inactivity for three years or more could result in the closure of the account.

3. Individual Retirement Accounts (IRAs)

IRAs are long-term investment accounts used for retirement savings. Although these accounts are less likely to see frequent activity, they can still be closed due to inactivity. For example, if a customer fails to make contributions or take required minimum distributions (RMDs), their IRA could be classified as inactive.

4. Certificates of Deposit (CDs)

CDs are time-bound deposit accounts with fixed interest rates. If a customer fails to withdraw or renew a CD at maturity, the account may be considered inactive. The bank may close the account and move the funds to an unclaimed property division if no action is taken within the prescribed time.

5. Safe Deposit Boxes

Safe deposit boxes are secure storage units offered by Bank of America for storing valuables or documents. If a customer fails to pay the required rental fees or does not visit the safe deposit box for an extended period, the bank may close the box and transfer the contents to state custody.

6. Brokerage and Investment Accounts

If a customer holds a brokerage account or other investment accounts at Bank of America and fails to buy or sell securities for several years, those accounts may also be flagged as inactive. Brokerage accounts are often used for long-term investments, but prolonged inactivity could lead to account closure.

Consequences of Account Closure

Funds Transfer to the State

Once an account is classified as inactive for a set period, Bank of America may close the account and transfer the funds to the state under escheatment laws. Each state has its own procedures for handling unclaimed property, but generally, once the funds are transferred, it becomes challenging to reclaim them.

If your account funds are transferred to the state, you will need to file a claim with the state’s unclaimed property division. This process can be time-consuming and may require you to provide documentation proving that you are the rightful owner of the funds.

Loss of Access to Funds

If you fail to keep your account active and it is closed by the bank, you will lose access to the funds in the account. Reclaiming the funds from the state may involve filing a claim and waiting for the state to process it. During this time, you will not be able to access the money, which could lead to financial hardship or inconvenience.

Accumulation of Fees

If your account is inactive for a long time, Bank of America may begin charging monthly fees or maintenance fees on the account. These fees can quickly reduce the balance of the account, especially if there are no deposits being made. In extreme cases, the balance can be reduced to zero, leading to the account’s closure.

How to Prevent Account Closure

1. Regularly Access Your Accounts

To avoid your account being classified as inactive, you should regularly log in to your online banking account and perform at least one transaction every 12 to 18 months. Even small transactions, such as transferring a small amount of money or paying a bill, can help keep your account active.

2. Update Your Contact Information

Bank of America relies on accurate contact information to send important notifications regarding your account status. Ensure that your email address, phone number, and mailing address are up to date so that you do not miss any critical communications. The bank may notify you if your account is at risk of closure, and staying informed can help prevent unwanted consequences.

3. Set Up Alerts

Setting up alerts for your Bank of America accounts is a simple and effective way to monitor activity. The bank offers a variety of alerts, such as balance alerts, transaction alerts, and payment reminders. These notifications will help you stay on top of your account activity and avoid inactivity.

4. Respond to Bank Communications

If Bank of America contacts you regarding inactivity or the status of your account, it is important to respond promptly. The bank may offer a grace period to prevent account closure, and failure to respond could result in the bank moving forward with the closure process.

What to Do if Your Account Is Closed

If your account is closed due to inactivity, the first step is to contact Bank of America’s customer service department. You can reach customer support by calling the number on the back of your debit or credit card or visiting your nearest branch. The bank may be able to reopen the account or provide instructions for reclaiming any funds that were transferred to the state.

If your funds have been escheated, you will need to file a claim with the state’s unclaimed property office. This process typically requires you to provide identification, proof of ownership, and possibly other documentation. It is important to act quickly to recover any lost funds.

Conclusion

Bank of America’s warning about closing inactive accounts serves as a reminder for customers to regularly engage with their accounts. By maintaining activity, updating contact information, and responding to bank communications, you can avoid the inconvenience of account closure and the potential loss of funds. If your account is closed, taking swift action can help you reclaim your assets and prevent future issues with account inactivity.

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