This initially seems like good news: You come across a forgotten certificate of deposit in a file or safe deposit box. It seems like found money, until you learn that your bank has no record of it.
When it comes to old bank accounts like C.D.s, time may not be on your side.
That’s the lesson Janice Coleman, 79 and a retired librarian, learned. She had been sorting through documents during a move and found a $25,000 C.D. that she had opened decades earlier. When she went to cash it, she was told it no longer existed.
That led her on a yearslong quest to find the money, including checking multiple states’ unclaimed property registries, contacting multiple financial regulators and hiring a law firm to help retrieve relevant tax records. But she has had no luck confirming what happened to her C.D., she said, which she opened in 1990 at a bank that another institution later acquired.
“I have tried everything,” Ms. Coleman said. “It’s like a morass.”
Here’s what to consider, if you find records of an old C.D. or bank account that you may have misplaced or forgotten about.
How can a bank account go missing?
One way is if a customer forgets about the account or otherwise loses touch with the bank. Banks are required to turn over funds in inactive or abandoned accounts to the state as unclaimed property, a process known as escheatment. Typically, the funds go to the state of the customer’s last known address. The required period of inactivity, or “dormancy,” can vary by state and the type of property, but for C.D.s is often three years or sometimes five.
During that time, the bank must try to reach the customer. If the customer doesn’t respond, the bank takes steps to close the account and transfer funds to the relevant state’s unclaimed property program.
All states, as well as the District of Columbia and Puerto Rico, have unclaimed property offices.
Most states hold the funds indefinitely, but some set deadlines after which the money belongs to the state and can no longer be claimed.
What should I do if I find an old C.D.?
C.D.s, also known as “time deposits,” are federally insured savings accounts issued for a fixed term, typically ranging from a month to as long as five years. Unlike money in a checking or savings account, funds typically can’t be withdrawn from a C.D. before the term ends without a penalty. So there are often no transactions within the account before its maturity date. That can mean people aren’t paying close attention to the accounts, making C.D.s easier to overlook than, say, a checking account.
The first step is to contact the issuing bank or its successor. “Don’t stop with the bank teller,” said Adam Rust, director of financial services at the Consumer Federation of America. Instead, he said, ask to talk to someone familiar with the details of dormant accounts.
Most C.D.s are now electronic, but in the past customers were given paper certificates documenting the account. Customers may assume that if they have the original certificate, it will be easy to find and withdraw the funds. But that’s not necessarily the case. Having the certificate doesn’t mean that the C.D. wasn’t already redeemed — meaning, the balance was withdrawn or transferred to another account. Customers could have withdrawn the funds without the certificate — by showing identification to confirm their identity — and forgotten they did that.
“C.D.s are a tough issue,” said Meaghan Aguirre, president of the National Association of Unclaimed Property Administrators. “You can have a physical certificate, but banks don’t always require it to be turned in when it’s redeemed.”
Ms. Coleman, the retired librarian, shared an image of her paper certificate, showing that she opened a six-month, $25,000 C.D. at 7.5 percent interest at a branch of First National Bank of Atlanta in Tucker, Ga., on March 30, 1990. (First Atlanta, as the bank was known, was eventually absorbed by Wells Fargo through an acquisition.)
Ms. Coleman said she had lived in Georgia when she opened the C.D., but moved to Indiana in 1991. She had kept important papers in a bank safe deposit box and found the C.D. there in 2019 when transferring documents to an in-home safe. “I don’t know how it fell through the cracks,” she said.
She visited a branch of Wells Fargo in Hilton Head Island, S.C., where she owns a home, in hopes of redeeming the C.D. but was told there was no record of the account.
In a letter she shared from Wells Fargo, dated March 25, 2020, the bank apologized for “any frustration” with the C.D., but said that “our records reflect that our Unclaimed Property Department has exhausted all avenues of research” and was unable to locate any information about the account.
While federal regulations require that banks retain customer records for five years, the letter said, Wells Fargo’s policy is to keep records for an extra two years. “We are unable to obtain account information beyond seven years,” it said.
Joseph E. Silvia, chair of the American Bar Association’s banking law committee, said banks typically purged customer account data after necessary holding periods.
A Wells Fargo spokesman declined to discuss Ms. Coleman’s situation, but said in an email that the bank had “completed comprehensive reviews of all available records” and shared the results with her.
“When there is no bank record of a C.D.,” it said, “the most common reasons are that the C.D. was already redeemed and the account closed or, as required by state law, the funds were turned over to the state as unclaimed property after a period of inactivity.”
Ms. Coleman dismissed the possibility that she had cashed in the C.D.: “I never redeemed it.”
How can I avoid having a bank account deemed inactive?
It’s important to keep your mailing address and other contact information updated with your bank, said Cindy Nisley, president of Georgeson Unclaimed Property Services, a company that works with businesses, including banks, to manage unclaimed property matters. “That alone will go a long way” to prevent problems, she said, because banks must notify you before transferring inactive funds to the state.
She also suggested periodically initiating contact with your bank — by logging on to online accounts to check balances, for instance — to keep the account active. “Take some action that shows you are taking interest,” she said.
Also, pay attention at tax time. If you have an active C.D., you should receive a 1099 income statement from the bank showing the interest paid on the certificate. The I.R.S. would also notify you if you failed to declare interest from a C.D. on your tax return.
How do I go about finding unclaimed property?
All states have a department dedicated to managing unclaimed property, including bank accounts, and nearly all participate in a national search tool at MissingMoney.com, Ms. Aguirre said. You can start with the state where you live or enter your information into the free search tool to search nationally. If you do find property in your name, you can enter more information, including your Social Security number, to start a claim.
Searches and filing claims are free. “Finder” firms may offer to help recover unclaimed property for a fee. Some are legitimate, but others may not be. The unclaimed property administrators’ group recommends checking with your state’s program before agreeing to work with a fee-based firm.
The post She Found a Long-Lost $25,000 C.D. Here’s What Happened Next. appeared first on New York Times.
