The bank is earning money from my savings, so why does it impose dormancy fee on my account?

What is dormancy fee?

Dormancy fee is the amount of money deducted from a savings account with no deposit or withdrawal for a period of 2 years, or a checking account with no deposit or withdrawal for a period of 1 year.

  • Savings account -- Dormant after 2 years of no deposit or withdrawal
  • Checking account or current account -- Dormant after 1 year of no deposit or withdrawal

Why is there dormancy fee?

Dormancy fee is used to cover the cost of maintaining a dormant account. Once an account becomes dormant, it undergoes several procedures that entail costs. These procedures include segregation of dormant accounts, periodic review of dormant accounts, and other internal control procedures. Dormant accounts are also included in periodic reports submitted by banks to the Bangko Sentral ng Pilipinas.

Dormant accounts are being checked periodically to comply with the  Unclaimed Balances Act of the Philippines. This law requires banks to report to the Bureau of the Treasury accounts that have been inactive for ten years.

How often is dormancy fee deducted?

Dormancy fee is deducted every month starting from the month of dormancy until it is activated by the depositor.

Is the depositor or account owner informed of the dormancy fee?

Yes, the BSP requires that banks disclose dormancy rules in passbooks or in other written agreements between the banks and their account holders.

Banks also need to mail notices of dormancy to account holders at their last known addresses through the postal mail or through couriers at least 60 days before the imposition of dormancy fees.

BUT based on personal experiences, many banks DO NOT inform their clients of their account dormancy.

Are all dormant accounts charged with Dormancy Fee?

No. Dormant accounts with balances equal or higher than the required maintaining balance should not be charged.
But ask your bank about their policy.

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