Don’t Sleep On Your Savings: Avoiding Dormant Accounts

Don’t Sleep On Your Savings: Avoiding Dormant Accounts

The best things to do with a savings account is to forget about it and let it earn dividends.

However, don’t forget about it so long that it becomes dormant. A dormant savings account is one with a low balance that has had no deposits in a while. While exact criteria varies in each state, generally accounts with less than $50 that have been inactive for more than 2 years are considered dormant.

 

All dormant accounts cost financial institutions money; they’re required to keep records of the account and send statements. Often, those statements are returned due to incorrect addresses and then require additional effort from the institution. These minimal costs add up when involving hundreds of accounts.

 

To reduce and avoid costs, financial institutions are permitted to close these accounts and transfer the funds to the state treasury department through a process known as escheatment. State treasury departments hold those funds in an unclaimed property fund.

This money isn’t lost, but is difficult to access. To reclaim it, you must complete numerous forms and wait several weeks while your request is processed. It’s much harder than visiting your credit union!

 

Fortunately, there are steps you can take to avoid dormancy.

 

1.) Keep track of your accounts.

You should know always where all your money is. Apps like Mint let you monitor all your accounts in one place by combining them in one screen. This way, you’ll never risk dormancy by forgetting about an account.

If you prefer a physical approach, keep your account statements in a file folder and create your own ledger so that you have one place where you can see all your accounts.

 

2.) Automate your savings.

An account can’t go dormant if it’s getting transactions regularly, even if it’s only $5 a month. But who can remember to do that every month, or would want that burden?

To achieve this easily, set up automatic transfers between your primary account and your savings, even for a minimal amount. This form of automatic savings keeps your account active.

 

3.) Clean up and roll over old accounts.

If you create different accounts for different savings goals, you might accumulate a dozen accounts over time, some of which you’ll forget to close when they’ve served their purpose. Each of those accounts is at risk for dormancy!

One way to avoid this is to make a general-purpose savings account and consolidate your funds there once every few months. Use that money for any purpose – anything is better than letting it risk being lost.

Similarly, If you’ve changed jobs, ask a financial planner about rolling over your old retirement account. Whatever you choose to do with your old retirement plan is better than nothing.

 

Act before it’s too late; clean up your dormant accounts today!

 

Your Turn: In what ways do you use your savings accounts to better manage your finances? Have you ever had to go through a claims process on an abandoned account? What was the experience like?

 

SOURCES:

When I Grow Up, I Want To….

When I Grow Up, I Want To….
If there’s a question that’s a basic standard in virtually all kindergarten classrooms, it’s “What do you want to be when you grow up?” While adults may smile about the ridiculous answers that kids give, it’s a serious question for children, not to mention an opportunity to talk about personal finance. Talking to children about potential careers can be a great way to help them try on interests while also getting a feel for the lifestyles attached to various careers.
It’s not just help in answering that age-old kindergarten question that we’re seeking, though. Kids who are able to connect school subjects to their plans for the future tend to do better in school, both in grades and on standardized tests. When education becomes instrumental to them, kids are more engaged and work harder. If math homework gets a child closer to a goal, it’s much easier to muster the energy to do it.
Parents are in an excellent position to help kids with this important decision. If you’d like to help your young person try on careers, ask yourself these three questions.
1.) What web resources are available?
Kids tend to learn best when adults turn them loose on a subject and get out of the way. Kids who are expressing an interest in learning about careers may benefit from some of the wealth of information on the internet. One of the best resources is the Department of Labor’s Occupational Outlook Handbook. It lists just about every job description, along with a breakdown of educational and experiential requirements, salary and growth opportunities. The reading can be a little tricky for very young kids who may need some help with vocabulary, but the charts and graphs are fairly accessible. The handbook also includes external links to professional organizations, many of which have resources specifically for kids who are interested in that career path.
2.) What do my friends do?
One of the best ways young people can learn about potential jobs is by seeing the work being done up close and personal. Reading about jobs on a website can get boring. Seeing a job done in person can provide a whole different perspective for a potential career. That’s where you can help. Identify people in your network who have jobs similar those your child has expressed an interest in, and see if they wouldn’t mind having a shadow for a day.
3.) What jobs do I need done?
Of course, there’s no substitute for doing. Find ways in which the kind of tasks you need done around the house can relate to a profession. A child interested in interior design might enjoy the opportunity to assist with a redecoration project. A kid who wants to be an engineer could practice problem-solving skills building raised garden beds. Giving kids a chance to develop practical, hands-on skills in a field of interest to them can help give them a leg up in that career.
YOUR TURN: What motivated you to choose your career path? How would you show your job to an interested member of the younger generation?
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Fresh Herb Fettuccini

Fresh Herb Fettuccini

Who doesn’t love pasta? Take a simple spaghetti dish to the next level by using fettuccini, fresh herbs and mushrooms.

Ingredients: 

  • 2 tablespoons olive oil
  • 2 cloves garlic, minced
  • 1 cup mushrooms, stemmed and sliced
  • 2 teaspoons freshly grated lemon zest
  • 2 tablespoons lemon juice
  • Salt and freshly ground pepper to taste
  • 8 ounces whole-wheat fettuccine (or preferred pasta)
  • 1/2 cup freshly grated Parmesan cheese
  • 1/2 cup chopped fresh basil, divided

Preparation:

Cook pasta according to package directions. Drain and reserve ½ cup of cooking liquid.

Heat oil in large nonstick skillet over low heat. Add garlic and stir until fragrant but not browned, about 1 minute. Add mushrooms and increase heat to medium-high; cook, stirring occasionally, until tender and lightly browned, 4 to 5 minutes. Stir in lemon zest, lemon juice, salt and pepper. Remove from heat.

Add pasta, the reserved cooking liquid, Parmesan and 1/4 cup basil to the mushrooms in the skillet; toss to coat well. Serve immediately, garnished with remaining basil.