What Happens When You Leave Your Savings Account Unused?

July 03, 2025

what-happens-when-your-savings-account-is-left-unused

Imagine waking up one day to find that your hard-earned money is locked away and inaccessible. Sounds stressful, right? This is precisely what happens when you leave your Savings Account inactive for too long. Many people open multiple bank accounts for convenience but fail to use them regularly. If you’re guilty of this, you might unknowingly be setting yourself up for unnecessary hassle.

 

Let’s explore what happens to an unused Savings Account, why it’s a bad idea, and what you can do to avoid the pitfalls of account dormancy.

 

What Is a Dormant or Inactive Savings Account?

A Savings Account is considered inactive if there have been no transactions for over a year. If it remains inactive for two consecutive years, it is classified as a dormant account. Once an account becomes dormant, the bank restricts various banking activities, making it difficult for you to access your money without additional formalities.

 

To keep your account active, ensure you conduct transactions like deposits, withdrawals, or online/UPI fund transfers periodically.

 

Why You Shouldn’t Leave a Savings Account Unused

Here are a few critical reasons why keeping an account inactive is a financial mistake:

 

1. Penalty for Non-Maintenance of Minimum Balance

Most banks require a minimum balance in Savings Accounts. If your inactive account doesn’t meet this requirement, you’ll be charged penalties. Over time, these deductions can reduce your account balance significantly. If you have a Savings Account with Ujjivan, kindly ensure to check the Monthly Average Balance maintenance requirement and the penalty charged due to non-maintenance of the same here.

 

2. Restricted Account Access

Once an account is marked dormant, you lose access to key banking services, including:

  • Cheque issuance
  • ATM/Debit card transactions
  • Internet and mobile banking
  • Fund transfers
  • Address updates or other modifications

 

Reactivating a dormant account requires Video KYC verification or KYC via bank branch, causing unnecessary hassle.

 

3. Missed Investment Opportunities

Leaving money idle in an unused Savings Account means you are losing potential earnings. Instead, you could invest in Fixed Deposits or Recurring Deposits, which provide better returns.

 

What Should You Do Instead?

  • Transact at least once a year to keep the account active.
  • Close accounts you don’t need to avoid unnecessary penalties.
  • Set reminders to perform small transactions periodically.

Final Thoughts

Having multiple Savings Accounts can be convenient, but neglecting them can lead to penalties, restricted access, and lost financial opportunities. If you have an unused Savings Account, take action now—either close it or ensure you keep it active with periodic transactions. Keeping your finances in check today will save you unnecessary trouble tomorrow.

 

Secure your future with a Savings Account! Build your wealth effortlessly while enjoying attractive interest rates, instant access to your funds, and seamless digital banking. Whether you're saving for a dream, an emergency, or a better tomorrow, the right account makes all the difference. Open your Savings Account with Ujjivan today and take the first step toward financial freedom!

 

Disclaimer:

The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.

 

Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk.  Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.

 

To know more about Ujjivan Small Finance Bank Products Visit:"https://www.ujjivansfb.in"

 

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to Ujjivan Small Finance Bank Limited or its licensors. Unauthorised use or misuse of any intellectual property, or other content displayed herein is strictly prohibited and the same is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person’s nationality, residence or otherwise) be contrary to law or registration or would subject Ujjivan Small Finance Bank Limited or its affiliates to any licensing or registration requirements.

   

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FAQs

1. What happens if I don’t use my Savings Account for a long time?

If you don’t use your account for over a year, it becomes inactive. After two years, it turns dormant, restricting transactions and requiring reactivation.

2. Can I reactivate my dormant Savings Account?

Yes, you can reactivate it by doing Video KYC or by visiting your bank branch with identity proof. Once KYC is done, you need to perform just one transaction to make your account active again.

3. Will my money be lost if my account becomes dormant?

No, your money remains safe, but you may incur penalties for non-maintenance of the minimum balance.

4. How often should I transact to keep my account active?

You should make at least one transaction per year (deposit, withdrawal, or online transfer) to keep it active.

5. Can I still receive interest on a dormant Savings Account?

Yes, interest will continue to be credited, but accessing the account will require reactivation.

6. Are banks allowed to close my dormant account?

Banks typically do not close dormant accounts on their own. However, accounts with zero balance may be closed as per bank policies.

7. Can a dormant account affect my credit score?

No, a dormant account does not impact your credit score unless you have unpaid dues or penalties linked to it.

8. What is the easiest way to prevent my account from becoming inactive?

A simple way is to set up auto-debits or make small transactions at least once a year.

9. Can I transfer my money from a dormant account to another account?

No, fund transfers are restricted in dormant accounts. You’ll need to reactivate the account before making any transactions.

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