As a matter of protection of customer's deposited funds and as a courtesy (to avoid a fee for inactivity), my bank want to start sending notices advising the customer of the accounts status in addition of mentioning other services as a Marketing tool. Are these dormant account notices required?

Maybe--you’ll need to review state law. In Washington, the Uniform Unclaimed Property Act requires financial organizations to notify customers with accounts in excess of $10 at least 90 days before imposition of a dormancy/non-activity fee.

How much do you charge for the dormancy/non-activity fee?

Our state requires we send a dormant account letter before we escheat the funds to them -after 5 years of dormancy. We don't like to blindside a customer, or get the nasty phone calls (waddya mean you're sending my money to the State!), so we send out dormant notices when a DDA account is dormant one year and a savings two years.

kira--our dormant account fee is $5 per month.

In many cases I think you'll find that you need to contract for it and the state needs to allow it. Texas does not allow a fee. For your state, you may want to look at the state forums below.