The last thing anyone needs is to be struck with an unexpected fee. The typical fee that financial institutions apply is an inactivity fee or dormancy fee. If your checking or savings account has been inactive for a certain amount of time, this fee will be charged to your account.
In this blog post, we’ll explain what a dormancy fee is, how much they are, and how to prevent them in the future.
What is a Dormancy Fee?
A dormancy fee is a penalty charged to an account holder for not using the account for a certain amount of time.
There is a reasonable justification for charging this fee. Let’s say you have money sitting in the bank, but your account is deemed as inactive because you haven’t touched that money in months. This accrues costs for the financial institution and the members and the fee is a way to redeem a small amount of that money.
Dormancy fees can also be applied to gift cards that have not been used for a certain amount of time as well.
How Much Are Dormancy Fees?
The amount that may be charged for inactivity ranges between financial institutions, but usually the fee is between $5 and $20 a month. It’s important to keep an eye on your deposits and withdrawals every month to ensure this fee is not being charged to your account without your knowledge.
Preventing Dormancy Fees
You can stop these fees by making some sort of deposit or withdrawal. It’s easy to do, but it’s easy to forget, too. One way you can ensure it never happens again is to set up automatic monthly transfers to or from your account. You can also set up direct deposits of your paycheck in your account or arrange daily transactions from another financial institution.