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Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.<\/em><\/p>\n Katelyn Fugate thought she was doing something nice for her young son. A few years back, she opened a savings account for him \u2014 a small starter fund he could build on one day. Recently, she decided to check in on it.<\/p>\n The balance was zero.<\/p>\n Fugate told Scripps News she went to check the balance hoping to start adding to it again. Instead, she found the account empty. (1) The bank had declared it dormant after five years of inactivity, closed it and shipped the money off to the state’s unclaimed funds department. Worse, when Fugate went looking for it, she couldn’t find the money at the bank or the state.<\/p>\n “It’s definitely not at the bank; they’ve turned it over. I can’t find it on the missing funds [website] as of yet,” she said.<\/p>\n The process is called escheatment, and it’s the law in all 50 states. (2) When an account goes long enough without customer-initiated activity, the bank is required by state law to hand the balance over to the state treasurer’s office as unclaimed property.<\/p>\n How long is “long enough” varies. Most states set the dormancy period at three to five years for bank accounts \u2014 and the trend has been toward shorter windows. Over a recent 16-year stretch, 17 jurisdictions cut their dormancy periods for bank properties to three years, down from five or seven. (3)<\/p>\n Automatic activity doesn’t reset the clock. Auto-deposits and interest postings don’t qualify as customer-initiated activity (4) \u2014 only a deposit, withdrawal or transfer you personally make resets it.<\/p>\n Before the money leaves, banks are required to attempt to contact you \u2014 typically by mail to your last known address. If the letter goes somewhere outdated or gets tossed as junk, escheatment continues without you. In some cases, the bank may simply mail a check for the remaining balance \u2014 little help if that check lands at an old address.<\/p>\n Read More: Robert Kiyosaki warned of a ‘Greater Depression’ \u2014 with millions of Americans going poor. Was he right?<\/strong><\/p>\n Ted Rossman, a principal analyst at Bankrate, told Scripps News that some banks flag inactivity after as little as six months.<\/p>\n<\/p><\/div>\n “That would be no money moving in or out, no transactions for six months,” he said. “Sometimes the threshold is a bit longer.”<\/p>\n Inactivity fees typically run $5 to $20 per month. For a small account \u2014 say, a few hundred dollars set aside for a child \u2014 those fees can wipe the balance out entirely before the state ever sees a dime.<\/p>\n There’s a secondary cost most people overlook: once a bank closes a dormant account, any scheduled transactions tied to it fail, which can trigger late fees or missed income depending on what was running through it. And under Regulation DD, banks must continue paying interest on dormant interest-bearing accounts (5) \u2014 but if the monthly dormancy fee exceeds the interest earned, the balance still shrinks.<\/p>\n Fortunately, avoiding inactivity fees is usually pretty simple. Many financial institutions offer high-yield savings accounts that come with no monthly charges, no inactivity fees and no minimum balance requirements.<\/p>\n The added bonus? Your idle cash can keep earning above-average interest while it sits there. It also stays liquid, meaning that you\u2019ve got it on hand for emergencies if needed.<\/p>\n A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.<\/p>\n A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%.<\/p>\n That\u2019s ten times the national deposit savings rate, according to the FDIC\u2019s March report.<\/p>\n Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000\/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.<\/p>\n With no minimum balances or account fees, as well as 24\/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.<\/p>\n Roughly $70 billion in unclaimed property is sitting in state coffers, waiting for rightful owners to come claim it \u2014 money from forgotten bank accounts, uncashed checks, safe deposit boxes and old brokerage holdings. About one in seven Americans has some of it. In fiscal year 2024, states returned $4.49 billion to owners (6) \u2014 a fraction of what they’re holding.<\/p>\n California alone holds more than $15 billion in unclaimed property and has returned roughly 3.5% of it, according to a recent CBS News investigation. (7) The scrutiny has now reached Washington: a bipartisan bill called the SAFER Act, introduced this month by Reps. Sam Liccardo and Mike Lawler, would limit when states can take custody of securities, digital assets and investment accounts under unclaimed property laws.<\/p>\n Most states place no statute of limitations on claiming escheated funds, meaning owners can demand their money back at any time. The reclamation process varies by state, though \u2014 and some are notoriously slow, as Fugate is discovering firsthand.<\/p>\n If you think you already have unclaimed money, start with the National Association of Unclaimed Property Administrators at unclaimed.org, which links to every state’s official database, or MissingMoney.com, NAUPA’s free multi-state search tool. Searches are free. Be wary of third-party “finders” who offer to recover your money for a cut \u2014 you can almost always do it yourself at no cost.<\/p>\n Once you\u2019ve recovered your unclaimed money, consider investing it prudently so that your cash works harder for you behind the scenes.<\/p>\n If you\u2019re sitting on a sizable amount of unclaimed money, there\u2019s a good chance you won\u2019t need to tap it right away. Instead of letting that cash sit idle in a standard checking account, you might consider putting some of it into certificates of deposit (CDs).<\/p>\n CDs lock your money in for a set period of time \u2014 anywhere from a few months to several years \u2014 but they typically offer higher interest rates than traditional checking or savings accounts. That means your cash can quietly work harder for you in the background.<\/p>\n You can find higher-yield options that work for you through CD Valet.<\/p>\n The platform tracks over 40,000 verified rates from FDIC-insured banks and NCUA-insured credit unions nationwide. Unlike other websites, they show every publicly available rate, ensuring you have a comprehensive view of the market.<\/p>\n Plus, their CD rates are updated continuously, so you can shop, compare and open CDs with ease.<\/p>\n For those willing to take on a bit more risk, putting some of that idle money into growth stocks could also help build your net worth over time.<\/p>\n Platforms like Moby can help you identify strong, long-term investments backed by advice from former hedge fund analysts.<\/p>\n In four years, and across almost 400 stock picks, Moby\u2019s recommendations have beaten the S&P 500 by almost 12% on average.<\/p>\n Moby\u2019s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts, and can help you reduce the guesswork behind choosing stocks and ETFs.<\/p>\n Moby offers a 30-day money-back guarantee, so you can sign up and see whether their recommendations align with your financial goals. Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.<\/p>\n If these steps feel overwhelming, it may help to consult a professional. A fiduciary financial advisor can help you build a financial plan tailored to your goals \u2014 whether that means investing extra cash, paying down debt, or planning for long-term growth.<\/p>\n You can find a vetted FINRA\/SEC-registered expert near you through Advisor.com.<\/p>\n Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios, and regulatory background.<\/p>\n All you have to do is enter a few details about your finances and goals, and Advisor.com\u2019s AI-powered matching tool will connect you with a qualified expert near you for free.<\/p>\n The best part? Advisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they\u2019re the right fit for you.<\/p>\n \u2014 With files from Rudro Charkrabarti<\/em><\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/strong><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our<\/em> editorial ethics and guidelines<\/em>.<\/em><\/p>\n Scripps News (1); HelpWithMyBank.gov \/ OCC (2, 4); Sovos (3); eCFR (5); NAUPA (6); CBS News (7)<\/p>\nTop Picks <\/h2>\n
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