Inactive bank accounts are about to be scooped up by the government for safe keeping.
May 31 is the date to remember and the time frame is three years of inactivity.
It is then your Authorised Deposit-Taking Institution (Bank, Credit Union etc.) will submit an unclaimed money return to ASIC for those accounts.
Those accounts will transfer to ASIC and be held until you come to claim them.
Now this isn’t new, previous Banking legislation going back to 1911 has had provisions for unclaimed money; however previous inactivity periods were set at seven years.
A slightly more palatable time frame.
In case you were wondering, interest and charges levied by the bank don’t count as a transaction.
Besides bank accounts, this will also apply to unclaimed life insurance policies, first home saver accounts and superannuation.
On the superannuation front, this legislation deals with superannuation members who have reached eligibility age (65), have not had a contribution from that member for two years and have been un-contactable for five years by their fund.
While some have described it as outright theft, the government is pointing out the benefits.
Specifically, unclaimed accounts will now be indexed at the rate of CPI inflation.
Although not a great benefit for someone who has left their money in a high interest savings account.
Nor will it impress those who’ve left money in trusts or are holding a bond for the length of a long term lease on a property.
Your bank should have contacted you if you’re in the danger zone; Westpac was recently advising some customers to transact a minimum of $1.00 (deposit or withdrawal) to ensure they were safe.
If you’re unsure of the status of any your accounts I’d suggest you take Westpac’s advice.
You can then sleep easy – at least for another three years.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL/ACL 224543, www.mfg.com.au This information is general in nature and readers should seek professional advice specific to their circumstances. Wondering who to trust with your financial affairs? We ‘re one of six fiduciary financial planners in Australia.
