Unclaimed deposits are funds or the amount of money that individuals have forgotten to claim back.
Unclaimed deposits run is crores in India. People or their heirs have forgotten or not in a position to claim these unclaimed deposits.
Irony … right. How can someone forget money!
Funds that is often left idle in various financial accounts such as bank accounts, investment accounts, Retirement accounts, Life Insurance etc.
Primary reason is – many people who are not aware that they may have unclaimed money waiting to be retrieved.
Another major reason is after death the person’s nominees or legal heir have not claimed these deposit back due to lack of information or legal matters.
In this article, we are going to explore this concept.
Understanding Unclaimed Deposits
It includes:
- Dormant bank accounts
- Uncashed checks
- Forgotten savings or fixed deposits
- Unclaimed insurance policies
- Unclaimed pension funds
These funds typically remain untouched, leading to them being known as unclaimed deposits or funds.
In Banking RBI has specified that “Balances in savings / current accounts which are not operated for 10 years, or term deposits not claimed within 10 years from date of maturity are classified as “Unclaimed Deposits”.
How Much Money we are talking about?
As per information available with the Reserve Bank of India (RBI), at the end of February 2023, the total amount of unclaimed deposits transferred to RBI by Public Sector Banks (PSBs) in respect of deposits that have not been operated for 10 years or more, was Rs 35,012 crore.
This is Banks only…imagine the money when you add unclaimed Mutual Funds, Post Office Deposits, Insurance, EPFO & Demats!
Reasons for Unclaimed Deposits
There are various reasons why deposits become unclaimed. Some of them includes:
- Relocation without updating contact information
- Forgetfulness
- Failure to claim benefits or entitlement
- Demise of a depositor or account holder
- Legal Disputes over the title
- Lengthy paperwork
In addition to this, lost papers or incomplete information like bank details or nominee name spelling can contribute to deposits remaining unclaimed.
What happens with Unclaimed Deposit?
These amounts are transferred by banks & institutions to the “Depositor Education and Awareness (DEA) Fund” maintained by the Reserve Bank of India.
The depositors are, however, still entitled to claim the deposits at a later date from the bank(s) where such deposits were held along with interest, as applicable.
RBI runs various public awareness campaigns directly or with the but the amount of these deposits is showing an increasing trend.
How to claim the Unclaimed Deposits?
Conduct a search
Start by conducting a thorough search for unclaimed deposits in your name or on behalf of deceased relatives. Contact the relevant financial institutions or visit the official websites and government agencies that handle unclaimed funds.
Most banks have link on website to check these deposits.
Good News : RBI is working of developing a common portal for banks where the list of these deposits will be provided.
Gather Documentation
Collect the necessary documents to establish your identity and ownership of account or investments. This may include identification proof, address proof, account numbers and any other relevant legal documents.
Contact the Financial Institution
You should reach out to the institutions or company where the account or investment are held. Inform such institutions about the unclaimed deposits and provide the required documentation to validate your claim.
Submit the Claim Form
Fill out the necessary claim form accurately and completely with all the necessary information. Double check the form before submitting it to avoid any mistakes. Attach the required supporting documents as per the instructions provided by the financial institutions.
Follow up
After submitting the claim form, follow up with the financial institutions regularly to inquire about the status of claim. Maintain all the documents for further interactions which include names, date and reference numbers, which will help in further process.
Conclusion
Unclaimed deposits represent a certain sum of money that individuals have unintentionally left behind. In the above article, we discussed about how to claim the unclaimed funds by taking proper steps from conducting a search to follow up or persistence.
Remember, taking the initiative to reclaim the unclaimed deposits can provide a welcome boost and brings peace of mind.
This article is researched & contributed by Charul Vijay (Intern).
