Time Flies...Make Sure Your Money Doesn’t Fly Away With It

Time flies as the old saying goes and years can seem like only a few months.  A forgotten check that you neglected to cash, a certificate of deposit that automatically renews each year, or a savings account at your mother’s credit union can all end up being money that flies away as well.  Bank and credit union accounts are considered dormant if there is no activity or contact by the account owner after a certain period of time.  Effective this year, the dormancy period for a checking, savings or certificate of deposit account has been shortened from five (5) years to a fleeting three (3) years. 

In less time than what most people take to pay off an automobile loan, a lack of activity or contact with your financial institution can result in your hard earned money being shipped off to your state government.  How much of this money is actually flying off to state coffers?  The State of Texas reports that it is currently holding more than $2.5 billion in cash and other valuables.  This occurs from a process called escheatment in which property is considered abandoned and forwarded to the State Comptroller’s office.

Of course you can always reclaim money that has been escheated  to the State Comptroller, but wouldn’t it make sense to prevent your money from being sent there in the first place?  States do not pay interest on your money.  While you may be earning a paltry sum now in some financial accounts, compare that to a zero percent interest rate.  Also, it takes more time to reclaim your money.  The State of Texas reports that it may take three or four months to review and process an Original Owner claim once it is received.

Credit unions and other financial institutions are busy this month running reports to determine if you and other members or customers have initiated any activity or contact in the last three years.  If they can’t reach dormant account owners before November 1, the money takes flight to the State Treasury.

Don’t let your money fly away through the escheatment process.  Take these recommended steps by the Texas Comptroller of Public Accounts today to protect your funds and prevent abandonment.

1. Check on your financial accounts annually. Keep a list of all of your bank and credit union accounts.  Make a transaction, send an email, or call the financial institution to check on these accounts at least once per year.
2. Complete a change of address when you relocate. To ensure any checks or other financial correspondence are forwarded to you upon a move or relocation, change your address with the United States Postal Service or your local post office.
3. Confirm your address for checks that your receive. Ensure that anyone issuing you reimbursement or other checks has your correct address.
4. Review safe deposit box contents annually. If you have a safe deposit box, review the contents at least once per year.  Also list it as a part of your estate and make sure a friend or family member is aware of it.

Being aware of escheatment rules for your state along with conducting a few simple steps to check on your financial accounts will save you future headaches.  Neighborhood Credit Union members can also learn more about protecting accounts from escheatment on our website. Time flies but you can ensure that your money doesn’t take flight along with it.

Article by Carolyn Jordan, Senior Vice President of Retail Operations at Neighborhood Credit Union