Imagine opening a savings account for your child, letting it sit untouched for a few years, then going back to check on it — only to find the balance at zero. This isn’t a scam or a bank error. It’s a legal process called escheatment, it happens to millions of Americans every year, and there’s a good chance you have money sitting in an account right now that’s quietly working its way toward a state government vault.
Roughly $70 billion in unclaimed property is sitting in state coffers right now. About 1 in 7 Americans has some of it.
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What Is Escheatment — And Why Should You Care?
Escheatment is the legal process by which a bank is required to hand over the balance of a dormant account to the state treasurer’s office as unclaimed property. It’s not optional — it’s the law in all 50 states. The idea behind it is well-intentioned: rather than letting banks quietly pocket abandoned funds, the state holds the money until the rightful owner claims it. The problem is that millions of Americans have no idea it’s happening to their accounts until the money is already gone.
The trigger is inactivity. When an account goes long enough without any customer-initiated activity — no deposits, no withdrawals, no transfers — the bank flags it as dormant and eventually turns the balance over to the state. “Long enough” varies by state, but most set the dormancy period at three to five years for bank accounts. And over a recent 16-year stretch, 17 jurisdictions actually shortened their dormancy periods, moving from five or seven years down to three.
Auto-deposits and interest postings do NOT count as customer-initiated activity. Only a deposit, withdrawal, or transfer you personally make will reset the dormancy clock. This catches many people off guard — an account receiving regular interest payments or automatic transfers can still be flagged as dormant.
The Fees Hit Before the State Does
Here’s the part that stings most: by the time the state gets involved, the bank may have already taken a significant chunk of the balance through inactivity fees. Some banks flag inactivity after as little as six months — no money moving in or out, no transactions. Once flagged, inactivity fees typically run between $5 and $20 per month.
For a small account — say, a few hundred dollars set aside for a child — those fees can wipe the balance out entirely before the state ever sees a dime. There’s also 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. Banks are required under Regulation DD to continue paying interest on dormant interest-bearing accounts — but if the monthly dormancy fee exceeds the interest earned, the balance still shrinks.
There Is a Lot of Forgotten Money Out There
The scale of unclaimed property in the United States is staggering. Roughly $70 billion is sitting in state coffers right now, waiting for rightful owners to come claim it — 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 — a fraction of the total they’re holding.
California alone holds more than $15 billion in unclaimed property and has returned roughly 3.5% of it. The issue has now reached Washington: a bipartisan bill called the SAFER Act, introduced this year, would limit when states can take custody of securities, digital assets, and investment accounts under unclaimed property laws — a sign that lawmakers are starting to take notice of how aggressively states have been sweeping up dormant funds.
“Even if it’s something small — put your Netflix subscription on there and have that transaction once a month. Kind of restart the clock.” — Ted Rossman, Principal Analyst, Bankrate
How to Keep Your Accounts Out of the State’s Hands
The good news is that preventing escheatment is straightforward — it just requires a small amount of regular attention. The key is keeping your account active with customer-initiated transactions, no matter how small.
Think You Already Have Unclaimed Money? Here’s How to Find It
If you think money may have already been escheated from one of your accounts, there are free tools to find it. Most states place no statute of limitations on claiming escheated funds, meaning you can demand your money back at any time — though the reclamation process varies by state and some are notoriously slow.
Run by the National Association of Unclaimed Property Administrators (NAUPA). Links to every state’s official unclaimed property database. Free to search — start here first.
NAUPA’s free multi-state search tool. Search multiple state databases at once rather than checking each individually. Completely free — no account required.
Be wary of services that offer to recover your money for a percentage cut. You can almost always claim it yourself at no cost directly through state databases. Don’t pay for something that’s free.
This article is for informational purposes only and should not be construed as financial or legal advice. Dormancy periods, fees, and escheatment laws vary by state and institution. Always verify with your bank and your state’s official unclaimed property office.
Don’t Let the State Keep Your Money
Seventy billion dollars is a staggering amount of money sitting in state coffers that belongs to ordinary people — people who opened accounts, forgot about them, moved houses, or simply didn’t know the rules. The fix is easy and costs nothing: keep your accounts active, know your bank’s inactivity policy, update your address, and check the free state databases if you think money may have already been swept up. A two-minute transfer once a year is all that stands between your savings and a state vault.