For millions of Americans, a savings account represents stability. It is where hard-earned money sits quietly, earning modest interest, waiting for a rainy day. Most people assume that once funds are deposited at a trusted bank or credit union, they are secure.
However, that confidence may be misplaced.
An Illinois retiree recently learned the hard way that even a six-figure nest egg can suddenly vanish from view. Not stolen. Not spent. Simply transferred away under a little-known legal process called “escheatment.”
A Shocking Statement
The trouble began innocently enough.
The retiree, who had placed her life’s savings into a credit union account, received quarterly statements showing steady monthly interest deposits. She watched the balance grow. Everything appeared routine.
Then, in the fourth quarter of 2025, the statement told a very different story. The account had been marked closed.
No warning call. No red flag. Just gone.
Understandably, she panicked. Where was her money?
Closed for “Inactivity”
When she contacted the credit union, she was told the account had been closed for inactivity. It had been classified as dormant and the funds had been sent to the state under “escheatment” (aptly named, given the circumstances).
That explanation raised more questions than answers.
After all, there had been activity. Interest was deposited monthly. Withdrawals occurred regularly. Statements arrived like clockwork.
Yet here is the critical distinction: those transactions were initiated by the institution, not by the account holder.
Under Illinois law, automatic interest deposits do not count as owner-initiated activity. If the account holder does not personally make a deposit, withdrawal, update contact information, or otherwise interact with the institution within the dormancy period, the account can be classified as dormant. In Illinois, that period is currently three years, though it varies by state.
In other words, quietly saving can be interpreted as neglect.
The State Says It Doesn’t Have It
After learning her money had supposedly been transferred, the retiree contacted the state. The response was equally alarming.
The state had no record of the funds. They did not appear on the unclaimed property website. Three months after the transfer was said to have occurred, the money could not be accounted for.
Meanwhile, the clock kept ticking.
Although escheated funds are generally held indefinitely for the owner to claim through the state treasurer’s unclaimed property office, the transfer must first complete an administrative process. That can take time. In this case, it left a retiree in financial limbo.
Due Diligence, Or Not?
Financial institutions are required to conduct due diligence before transferring dormant funds. Typically, that means attempting to contact the account holder, often by mailed notice.
The credit union said they mailed a notice of closure. It was not sent via certified mail, and the retiree never saw it. The only notice she received was the final statement showing the account closed.
Could the institution have tried harder? A phone call. An email. A follow-up letter. Those efforts were not made.
In the meantime, the retiree not only lost access to her savings but also missed out on higher-value interest payments for three months and counting.
Eventually, after additional pressure and documentation, the state treasurer’s office provided a form requesting detailed information from the credit union about when the money had been forwarded. Only after persistent follow-up did the institution acknowledge receipt and compliance.
Still, the funds remained unaccounted for.
Why Seniors Are Especially Vulnerable
This story is a red flag for everyone, but especially for seniors or soon-to-be retirees who put money into savings and don’t do anything with it.
Retirees often treat savings accounts exactly as intended: safe storage. They may not make frequent transactions. They may not log into online banking regularly. They simply allow interest to accumulate.
Ironically, that hands-off approach can trigger dormancy rules.
Even regular interest postings do not qualify as keeping the account active. Without owner-initiated activity, the account can be shut down and transferred.
For someone living on a fixed income, that disruption can be devastating.
How To Protect Yourself
So what can account holders do?
First, confirm that your bank or credit union is insured by the FDIC or NCUA, respectively. Also ensure that each of your accounts does not exceed the insurance limit, which is $250,000 per depositor, per insured institution, per ownership category. If necessary, divide funds across institutions or ownership categories so each portion remains covered.
Second, research your state’s escheatment laws. Even if the dormancy period exceeds one year, consider initiating at least one transaction every six months. A small deposit or withdrawal can keep the account classified as active.
Next, review statements regularly. Look for unusual notices, warnings, or language suggesting inactivity.
It may also help to work with a financial institution that maintains a physical branch. Establishing a relationship with staff can provide a valuable internal contact if issues arise.
If customer service dismisses concerns, bring in a trusted friend or relative to advocate on your behalf. In this case, additional involvement helped move the process forward.
Finally, consider documenting interactions. In one instance, the caller informed customer service that the conversation was being recorded for records, subject to state recording laws. That transparency underscored the seriousness of the matter and created a record should the issue escalate.
A Rule That Few Understand
Escheatment laws were originally designed to prevent financial institutions from indefinitely holding abandoned assets. In theory, the state safeguards funds until rightful owners reclaim them.
However, when applied rigidly, the rule can create unnecessary panic and hardship, particularly for retirees who believe they are doing the prudent thing by leaving savings untouched.
Savings accounts are supposed to be for saving. Financial institutions are supposed to be trusted.
Yet in today’s environment, trust must be paired with vigilance.
While escheated funds are typically recoverable, the process can involve delays, paperwork, and lost interest. Preventative steps, by contrast, take only minutes.
The lesson is clear. Do not assume that inactivity equals safety. Sometimes, doing nothing can cost you everything, at least temporarily.
