Do Not Let Your Savings Account Fall Asleep

Do Not Let Your Savings Account Fall Asleep

In order to achieve long-term financial goals, it is advisable to park funds in an account and forget about it. In case an emergency arises, the amount may be utilized and if there is no requirement to utilize the amount, the fund will only grow. Even if it remains in an account, it will earn interest regularly.

However, a savings account should not be totally forgotten; else it eventually becomes dormant. A dormant account is a savings account that has not seen any transaction in a long time and carries a very low balance. Transactions here imply only those activities initiated by you in the account. Bank-initiated transactions like the credit of interest and service charges are not taken into consideration. The duration of inactivity to consider an account dormant varies from bank to bank.

Here is how you may ensure that your savings account does not become dormant

It is important to check your savings account from time to time and take appropriate action in order to maintain its active status.

  • Plan auto-credit transactions

The best method to generate funds is to ensure a regular deposit in the account. In order to prevent an account from becoming dormant, it is advisable to set up automatic transfers each month. This means a regular amount will be deposited to the savings account each month from the primary account and this will keep the account active.

  • Track your accounts

It is now an easier task to keep a track of the accounts. Even if you have multiple accounts, you may use an app to keep a track of all the accounts. It is important for every account holder to revisit the account from time to time and learn about where and how much money is parked in their accounts. Banks also send account statements from time to time, which contain detailed information about the transactions. If you are not digitally savvy, you may maintain a separate file with all your bank statements.

  • Close multiple savings accounts

Many individuals have a habit of opening a separate account for every financial goal. In order to make it easier to maintain the accounts, any inactive or low-balance account should be closed and the amount should be transferred to a single account. This will make it convenient to manage and keep a track of the account and will also reduce the risk of a dormant account.

Whether savings account or any other account, it is important to check the account balance from time to time. This will help gain insights into the deposits and withdrawals in the account and will enable you to do a better financial planning.

Categories: Finance

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