Inactive vs Dormant Savings Accounts

Difference Between Inactive and Dormant Accounts

What Happens to an Inactive or Dormant Savings Account?

After your account becomes inactive or dormant, transactions generated by the system like interest credit will be invalid. However, in case earnings of a fixed deposit (FD) or dividend on your shares are credited to your savings account, then such activities will be regarded as a customer-induced transaction. Therefore, the savings account will be considered operative provided the FD funds/dividend are transferred to it.  

An inactive account cannot be used to avail bank services like internet banking, request debit cards/cheque books, etc. Furthermore, you will be unable to alter your contact number, address, or email address if your account becomes dormant. ATM transactions, phone banking, and internet banking cannot be availed through a dormant account in addition to the restrictions that apply to inactive accounts.  

How to Activate an Inactive or Dormant Savings Account?

If you want to activate your inactive savings account, you need to perform banking activities like paying bills, depositing or withdrawing cash, or transferring money. Some banks offer an internet banking facility to activate inactive savings accounts. You can also reach out to the bank’s branch or customer care for account activation.  

To activate a dormant savings account, a formal request as well as proof of identity has to be submitted. The account activation process may also require your signature. When submitting your income tax return, make sure to provide information about your active, inactive, and dormant current and savings accounts. The income tax return must include information on every bank account held in India during the preceding year, with the exception of those that have remained inactive for more than three years. 

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