I'm a little confused on IC 28-1-20-1.1 for dormant accounts. It says that demand deposit accounts are dormant after 1 year and time deposit accounts after 3 years. I'm not sure on the definitions of these types of accounts. Where do NOW accounts and savings accounts fit in?

Is there a certain amount that an account has to be at before it can be considered dormant? Right now someone in operations is taking customers off dormant status if the account is below $10, but I don't see this stated in the regs anywhere.

How do other banks handle dormant accounts? Do you send out letters to customers telling them of their status?

We treat our NOW accounts as DDA (1 year) and savings are 3 years. We do not remove customers from dormant status when they fall below a certain balance.

We do not send letters to customers. Their statements indicate either "Status: Active" or "Status: Dormant." We do monitor closely dormant account statements that are returned to us as undeliverable.

I agree with Hoosierland. Additionally, we charge the customer a dormant account fee of $2.00 and we send them a statement which identifies the charge. The only way the account can be removed from a dormant status is if the conduct a debit or credit transaction.