Starting in 2025, however, banks in Australia will impose much stricter rules upon the handling of inactive or dormant accounts, where the intention behind such changes is to promote operational efficiency, maintain accuracy of data, and decrease incidences of fraudulent. In such a way, the new rules are part and parcel of attempts to modernise banking practices to fit within the broader digital-first strategy in the financial industry.
Why Are Banks Changing Their Policies Regarding Dormant Accounts?
For a long period, dormant accounts, being the ones lacking activity for an extended period, used to be left open by banks while sometimes holding petty cash or forgotten small amounts. From a dormant account perspective lies a window of risk of misuse through unauthorised access, thereby potential identity theft-if, for instance, the contact address of the holder in banks is outdated.
Banks are now eager to formalise processes through which dormant accounts of their holders will be closed in hurried measure, whilst keeping the customer funds in safety-with regulators such as Australian Prudential Regulation Authority (APRA) backing the move.
Defining Inactivity in an Account
From 2025 onwards, an account will be considered inactive if there has not been a customer-initiated activity for a continuous period of 12 months. This includes making a deposit, making a withdrawal, or even logging into the online banking system.
Once an account is flagged inactive, the bank will either call or write to the holder for them to state whether the account is still needed in the late afternoon. If there is no response or action from the account holder within a reasonable time, the bank shall take steps to close the account.
Accompanying Procedures for Cash
Funds accumulated in a closed inactive account shall certainly not be lost. The balances from these accounts will in most cases be transferred to the Australian Government’s unclaimed money register, which owners may reclaim anytime by going through a formal process for submitting a request. It is suggested that customers check the ASIC MoneySmart website from time to time to track any money moved.
How to Stop Inactive Account Closure
Carry out some transactions at least once a year. Hence, the bank does not consider the account inactive. Regularly updating personal information with the bank, particularly under changes of address or contact numbers, is key. Also, ensure online banking is kept active.
Conclusion
The changes from 2025 herald a forward-looking approach to financial safety and efficiency in the system. So if you have many accounts, now would be a great opportunity to check them again and share some on them by way of activities.