Ask Money Today: What happens to funds in inactive bank account?–business today

Clipped from: https://www.businesstoday.in/money/ask-money-today/ask-money-today-what-happens-to-funds-in-inactive-bank-account/story/437667.html

As per RBI guidelines, a savings or current account becomes ‘inoperative’ without transactions for two years

Ask Money Today: What happens to funds in inactive bank account?

I had an HDFC Bank current account (in addition to a savings account) which I created way back in 2008. I had parked some funds in that account but couldn’t use the same due to restriction from the bank. Now I see that the account value is zero. Upon calling customer care, I was informed that the amount went to DEAF account, and I need to visit the nearest branch to recover the amount. What is a DEAF account? Is there any possibility of recovering the amount from the above account?

— Mukesh Biswas

By Adhil Shetty, CEO, BankBazaar.com

You need not worry. Your money can be recovered. As per RBI guidelines, a savings or current account becomes ‘inoperative’ without transactions for two years. If inoperative for 10 years, the account’s balance and interest are transferred to the Depositors’ Education and Awareness Fund, which was launched by the RBI in 2014. Banks are required to update the depositor about these developments. However, they may sometimes be unable to reach the depositor. With the DEAF, the balance will accrue interest at a rate mandated by the RBI. To recover this fund, you need to contact your bank branch and fill out the requisite forms and provide your KYC documents. Your bank will contact the RBI to recover the funds. You can also revive your inoperative account by completing your KYC. As a habit, ensure that you operate your account regularly. Accounts you do not need can be closed to avoid monthly balance requirements and various charges. Also, always ensure you have updated your nominee details on all your financial accounts.

(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)

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