Expert issues warning over US bank accounts sitting idle: Money can now be turned over to state if you're not careful. Secure what's yours ASAP

Fugate told Scripps News she went to check the balance hoping to start adding to it again. Instead, she found the account empty. (1) The bank had declared it dormant after five years of inactivity, closed it and shipped the money off to the state's unclaimed funds department. Worse, when Fugate went looking for it, she couldn't find the money at the bank or the state.

"It's definitely not at the bank; they've turned it over. I can't find it on the missing funds [website] as of yet," she said.

How dormant accounts get swept up by the state

The process is called escheatment, and it's the law in all 50 states. (2) When an account goes long enough without customer-initiated activity, the bank is required by state law to hand the balance over to the state treasurer's office as unclaimed property.

How long is "long enough" varies. Most states set the dormancy period at three to five years for bank accounts — and the trend has been toward shorter windows. Over a recent 16-year stretch, 17 jurisdictions cut their dormancy periods for bank properties to three years, down from five or seven. (3)

Automatic activity doesn't reset the clock. Auto-deposits and interest postings don't qualify as customer-initiated activity (4) — only a deposit, withdrawal or transfer you personally make resets it.

Before the money leaves, banks are required to attempt to contact you — typically by mail to your last known address. If the letter goes somewhere outdated or gets tossed as junk, escheatment continues without you. In some cases, the bank may simply mail a check for the remaining balance — little help if that check lands at an old address.

The fees hit before the state does

Ted Rossman, a principal analyst at Bankrate, told Scripps News that some banks flag inactivity after as little as six months.

"That would be no money moving in or out, no transactions for six months," he said. "Sometimes the threshold is a bit longer."

Inactivity fees typically run $5 to $20 per month. For a small account — say, a few hundred dollars set aside for a child — those fees can wipe the balance out entirely before the state ever sees a dime.

There's a secondary cost most people overlook: once a bank closes a dormant account, any scheduled transactions tied to it fail, which can trigger late fees or missed income depending on what was running through it. And under Regulation DD, banks must continue paying interest on dormant interest-bearing accounts (5) — but if the monthly dormancy fee exceeds the interest earned, the balance still shrinks.

There's a lot of forgotten money out there

Roughly $70 billion in unclaimed property is sitting in state coffers, waiting for rightful owners to come claim it — money from forgotten bank accounts, uncashed checks, safe deposit boxes and old brokerage holdings. About one in seven Americans has some of it. In fiscal year 2024, states returned $4.49 billion to owners (6) — a fraction of what they're holding.

California alone holds more than $15 billion in unclaimed property and has returned roughly 3.5% of it, according to a recent CBS News investigation. (7) The scrutiny has now reached Washington: a bipartisan bill called the SAFER Act, introduced this month by Reps. Sam Liccardo and Mike Lawler, would limit when states can take custody of securities, digital assets and investment accounts under unclaimed property laws.

Most states place no statute of limitations on claiming escheated funds, meaning owners can demand their money back at any time. The reclamation process varies by state, though — and some are notoriously slow, as Fugate is discovering firsthand.

How to keep your accounts out of the state's hands

Rossman's fix: keep the account moving, even a little.