U.S. Bank Account Dormancy The Truth Solutions You Need to Know

Dormant U.S. Bank Accounts What You Must Know and How to Respond

In recent years, as more Chinese residents, international students, overseas workers, and cross-border e-commerce professionals interact with U.S. bank accounts, attention to the finer points of account management has grown significantly. Among these, the issue of dormant accounts has emerged as a critical but often overlooked concern.

Several U.S. banks have recently updated their account management policies, implementing stricter controls on long-inactive accounts. This change has drawn widespread attention and serves as a reminder for users to actively manage their accounts.

What is a Dormant Account?

A dormant account, also known as an inactive account, is generally defined as a bank account that has not had any active transactions-such as deposits, withdrawals, transfers, or purchases-within a certain period. While definitions vary slightly across banks, the typical threshold is 6 to 12 months without any activity.

Common Consequences of Dormant Accounts

Once an account is classified as dormant, users may face several restrictions and consequences

1. Limited Account Functionality Many banks restrict certain features of dormant accounts, such as online transfers, automatic payment services, or even debit card usage.

2. Dormancy Fees Some banks begin charging a monthly inactivity fee ranging from $5 to $15 once an account becomes dormant. If users are unaware, this can deplete the account balance and even result in a negative balance.

3. Automatic Account Closure If an account remains dormant for an extended period-typically 12 to 24 months-banks may close the account according to internal policies. Recovering a closed account often requires extensive identity verification and documentation, with no guarantee of success.

4. Impact on Credit Records While regular bank accounts don’t directly affect credit scores, if the account is linked to automatic payments e.g., credit card bills or utility payments, failed transactions due to dormancy can indirectly damage credit records.

Recent Policy Updates and News 2025

In 2025, several major U.S. banks-including Citibank, Bank of America, and Wells Fargo-revised their account management policies.

Citibank now charges a $10 monthly inactivity fee for savings accounts that remain unused for 12 consecutive months. The bank has also strengthened its monitoring system and automatically closes accounts that have been inactive for over 18 months.

Bank of America announced in Q1 2025 that it would conduct more frequent cleanups of dormant accounts to enhance system security and operational efficiency. While the move did not trigger widespread complaints, it prompted many users to reevaluate their account usage.

Why Banks Care About Dormant Accounts

From the banks' perspective, dormant accounts increase data management costs and pose compliance risks. In an era of increasingly stringent anti-money laundering AML and know-your-customer KYC regulations, banks must ensure the authenticity and activity level of each account.

This is especially important for non-resident or foreign accounts. Banks are now more cautious about accounts held by individuals who do not reside in the U.S. or who rarely use their accounts, which can lead to quicker flagging, dormancy classification, or even closure.

How to Prevent and Manage Dormant Accounts

To avoid the risks associated with dormant accounts, users can take the following proactive steps

1. Perform Small Transactions Regularly

To keep an account active, conduct at least one transaction every 3 to 6 months-such as using an ATM, making a small debit card purchase, or transferring a small amount between accounts. Even a $1 transaction can reset the activity clock.

2. Set Up Automatic Transfers or Recurring Deposits

For accounts used primarily for savings or investments, setting up a small monthly transfer from another account can help maintain activity without disrupting cash flow.

3. Update Account Information Promptly

Make sure the bank has your current contact details, address, and employment information. Failure to respond to bank communications can accelerate the dormancy process.

4. Understand Bank-Specific Policies

Each bank has its own rules regarding dormant accounts. Visit the bank’s official website or contact customer service to understand the specific terms and conditions.

5. Avoid Maintaining Unused Accounts

Close unnecessary accounts after confirming that all linked services-such as subscriptions or automatic payments-have been canceled. This prevents future complications.

6. Use Mobile and Online Banking Tools

Most U.S. banks offer mobile apps or online banking platforms that allow users to monitor account status, transaction history, and fees in real time. Timely detection of issues can help prevent further damage.

Conclusion

In today’s globalized world, maintaining a U.S. bank account has become a practical necessity for many people. However, account management details are often overlooked, and dormant accounts can become a hidden trap. By understanding bank policies, keeping accounts active, and taking preventive measures, users can avoid unnecessary financial loss and account closure.

Remember the life of an account lies in its use. Only through consistent attention and proper management can you ensure both financial security and convenience.