How Long Must Banks Keep Personal Account Records?

How Long Must Banks Keep Personal Account Records?
••• financial report image by PaulPaladin from

Federal laws require banks to keep customer account records for at least five years. Financial institutions turn over inactive and unclaimed accounts to the state. Each state determines the time frame after which an account becomes inactive.

Federal Law

Federal retention laws state that a bank must keep financial records for any account with a balance of $100 or more for at least five years. The bank may decide to keep records longer.

Inactive Accounts

An account becomes "dormant" when there is no customer-initiated activity, such as deposits or withdrawals, for at least six months. Depending on the bank's policies, after three-to-five years of being dormant, the account becomes inactive. The bank will make an attempt to contact the owner of the account. If there is no response, the bank will transfer the funds from the account to the state. This process is called "escheating."

Abandoned Accounts

Inactive accounts become abandoned when the owner cannot be located. This can happen when the owner dies and leaves no beneficiaries. Owners may forget about accounts, especially, when these accounts are not primary. Some financial institutions do not mail statements on inactive accounts. It is easy to forget about an account when there is no monthly reminder. Abandoned accounts become the property of the state after three to five years. If the owner or beneficiaries want to claim, they need to contact the state unclaimed property office or the state treasurer.