A Wednesday rant

Last week I finally finished my state income taxes, and I filed and paid on-line. No, I am not going to rant on the outrageous Jasper County income tax--I have already done that. This year I am complaining about the $1.00 charge that the state has for anyone who pays electronically. If the state actually wants people to file electronically (as it says it does) and pay with a direct transfer from their checking accounts, then the state should give people a $1.00 remission rather than charging them a $1.00.

That is my little rant. My larger rant is about inactivity fees that banks charge. We got a call last week telling us that a joint account we have with a son had gone inactive and that, as a result, each month the bank was charging the account a $5 inactivity fee. I went in to close that account and another account (one was a checking and one was a savings account), and found that both accounts had been declared inactive and that 5/3 was taking money from both. Naturally, my son was quite upset by this.

I do not understand the rationale for these fees--it seems pretty much like legalized theft.

I wondered if the big banks had a different policy than the small, community banks, so I called all the banks in town and asked them what their policy was on inactive accounts.

Fifth-Third: Some accounts are subject to inactivity fees and some are not. The person I spoke to was vague about how long it took for fees to be charged. She said that it took a couple months for the account to be declared dormant, and then after a couple of months the fees would start.

Lafayette National: After one year a checking account with no activity will be declared dormant, and after two years a savings account. The inactivity fee is $5 per month.

National City/PNC: Some accounts are subject to a maintenance fee if they do not meet minimum requirements, and others can be subject to inactivity fees if they have no activity. A checking account with no activity for six months is inactive, and a savings account with no activity for a year is inactive.

Kentland State Bank: After one year with no activity either a checking or savings account is considered inactive. The person I talked to said that they then try to contact the owner and tell them to do something with the account. It sounded as if they made an effort to avoid the fee, which was recently changed to $9.00 per year. After a certain number of years of inactivity,  the account, she said, could be claimed by the state.

Alliance Bank: The person I talked to said that after a year of inactivity the account was dormant. She said that after a certain period that state would take it, but she said that the bank did not charge any fees.

Demotte State Bank: After one year of inactivity, a checking account is considered dormant. After three years a savings account is dormant. The fee for a dormant checking account is $.75 per month, and the fee for a dormant savings account is $2.25 per quarter.

I also checked our local credit union, First Trust. After getting their very unfriendly telephone answering message, I talked to a real person who seemed not to know what an inactivity fee was. She searched around and could not find any mention of an inactivity or dormancy fee.

Note to everyone: If you have checking accounts or savings accounts that you do not regularly use, close them. If you do not, banks will steal the money you have in them, and if the banks do not get it, the state will. Also, if you insist on keeping accounts that you do not use much, you are likely to be much better off if you have them in the local institutions than in the branches of the regional banks.

Note to grandparents: You might think opening a savings account for a grandchild is a nice thing to do, but make sure you understand how inactivity fees work before you do so. By the time the child is 18, the money you put into that account may not have grown through interest payments. It may have disappeared via inactivity fees.

Note to local banks: If any of the information about your inactivity or dormancy fees is incorrect or incomplete, feel free to correct it in the comments.

Comments are also welcomed from any of the readers who have experienced inactivity fees.