Tiny Living and Money Matters

How to Reactivate your Dormant Bank Account

You’d think that as long as you maintain your minimum balance in your savings account, it will continue to incur interest and remain accessible without you doing anything. I recently found out that this is not correct.

Pablo started earning at 11 years old when he unexpectedly snagged the role of Nigel in Atlantis Theatrical’s staging of Matilda. The checks weren’t really that big, but it was a good opportunity for him to start learning how to manage his earnings and how to save, after all, DOLE mandates we do not use the child’s earnings for spending, which was just fine with me as I believe that while a child is under a parent’s supervision, the responsibility of providing for the child falls on the parent. (I explained about DOLE a bit more extensively in another blog, The Working child and his savings account.)

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After Kinky Boots Rerun, which was technically his second show but third contract, Pablo focused more on his studies and attending workshops, so we decided to give him a small weekly allowance for him to continue practicing his money management skills.

We also opened a Mutual Funds account for him and his brothers to teach them how small investments work, and because he only had small projects here and there after his stint with Kinky, we encouraged him to put all his savings in his MF account instead and left his bank account to itself.

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Pablo has to wait until he’s 18 to change his Junior account into a regular savings one.

(READ: School allowance and money management)

Recently, the kids received some checks from their voice acting gigs so I asked my husband, Jay, to withdraw them from my account and deposit them into their respective banks.

With Metrobank, it’s usually easy to do that as we can just go to whatever Metrobank is closest to us. That’s when we learned that Pablo’s bank account has been marked dormant, therefore, we couldn’t deposit his money without bringing him to the actual branch where he opened his savings account.

Pablo’s money in the bank is more than the minimum maintaining balance which we thought would be enough to keep it going, but we were wrong. According to the teller, an account that hasn’t had any activity from its owner for at least two years will be considered dormant.

This practice seems to be standard among banks, as a friend of mine who hasn’t touched her savings for a couple of years was also asked to do the process to have the account reactivated.

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Reactivating your account is an easy process.

This wouldn’t have been so hard since the branch is within our location, except that there have been some restrictions put in place for minors because of the pandemic. Luckily, they have eased up a bit on 15 year olds and Pablo was able to enter his bank’s branch and reactivate his account.

How to reactivate your dormant savings account

The process is quite easy. All you have to do is appear at your branch in person, bring a valid ID (Pablo brought his passport), and deposit money into your account.

Simple.

But why do these banks do this?

Why banks mark your savings account dormant

Basically, your account has been marked dormant because it’s been inactive, meaning, you have not been depositing, withdrawing, transferring or using the money in your account at all.

And because it’s been inactive, employees of the bank are required to keep an eye on any possible fraudulent or suspicious activity on the account.

The bank also stops deducting fees and penalties from your account, nor will your account incur interests until you have reactivated it.

Sounds just okay, yeah? Well, yeah, your account is secure to a certain degree, but this brings about some problems, too.

The hassles that come with a savings account gone dormant

If your account has been marked dormant, you cannot be issued a fresh cheque book, you can’t apply for a debit card nor can you use the last one you’ve been issued, you cannot access internet banking, you cannot withdraw from your ATM, and as in our case, you cannot even deposit  money into it from a different branch.

It can be a bit of a hassle because you’ll never know when you’re going to need it and WHERE you’re going to need it.

For example, what if you have a dire need to access your account from another location?

So, much as it seems fine to leave your account dormant for a while, it can also bring you a wave of trouble when you need to access it, so it is best to avoid getting into this situation.

Besides, what’s the point of keeping money in a bank if it will not generate interest? You might as well put it in your piggy bank. Think about it.

If you intend not to touch your savings in an account, look into time deposit, or better yet, the bank’s mutual funds program where your money can grow.

But if it’s somewhat intended as an emergency fund, you will have to comply and deposit in it at least once a year. This way, in times of emergency, you can always access your savings without any problem.