While Germany is trying to make major budget cuts, billions of euros are quietly lying unused and unknown in banks and other financial institutions in so-called forgotten accounts.
A 2021 report from the country’s research ministry estimated that such accounts held up to €4.2 billion ($4.9 billion). Other estimates are much higher, some as high as €9 billion. The banks themselves have not released any data.
As people age, have multiple accounts, or die, relatives and heirs have difficulty identifying the accounts.
Online banking, with no paperwork or printed statements, makes this more difficult because the information is locked to email accounts or hard drives. Tracking non-traditional financial assets like cryptocurrencies or NFTs is even more difficult.
What is an abandoned account?
Abandoned, forgotten, or dormant accounts involving traditional financial assets are simply bank deposits or securities, such as stocks and bonds, that remain untouched for a period of time.
In Germany, there is no official definition of abandoned accounts, and they can remain inactive for years.
Due to the lack of legal framework the matter is left to the banks themselves, but most banks take into account the following:
- The account holder has died, and no heir has been found.
- There has been no customer contact for years.
- Postal mail is returned and other contact data is out of date.
This also gives banks flexibility in how much they invest in finding owners or successors. A major hurdle is the country’s strict data protection rules.
How to find abandoned German accounts?
In Germany, dormant accounts do not become property of banks or turn over to the government. Banks must hold these accounts indefinitely, and ownership – whether by the original owner or their heirs – never expires.
The German government can only claim the account if they are declared heirs under the country’s inheritance law, not under any unclaimed property rules.
The biggest need is a central dormant account register that can be used to determine whether someone has held accounts somewhere, says Beatrice Eisenschmidt, a board member of VDEE, the Berlin-based association that represents professional succession seekers.
Today, inquiries must be sent to various banking associations, a process that takes time and money. For heirs, this is usually a shot in the dark without knowing whether there is an asset or not.
“For this reason, many heirs choose not to pursue these inquiries,” Eisenschmidt told DW.
Effort to create a national registry
Nearly a decade earlier, Norbert Walter-Borjans, then finance minister of North Rhine-Westphalia, the country’s most populous state, estimated that about €2 billion ($2.2 billion at the time) was held in dormant accounts across Germany.
He called for a national registry of idle assets and several efforts have been made since then.
The current federal government headed by Chancellor Friedrich Merz has come up with draft legislation to create a central, publicly accessible online register where heirs can search for information. But no new rules have been passed yet.
What exactly to do with the money is still unclear.
A recent survey conducted by the charity SOS Children’s Villages found that 86% of people would like to see forgotten bank assets flow into a fund for social projects after a reasonable period of time, while only 8% think it should go to the government and 2% think the banks should keep it.
Abandoned accounts: always recoverable in some countries
In the UK, dormant accounts are usually transferred to a reclaim fund rather than the government after 15 years. This fund is to support social and environmental projects. But the money can be reclaimed indefinitely.
Ireland has similar deadlinesBut there the money is transferred to the treasury, which also uses it for social projects. The institutions are obliged to publish a notice in two national newspapers before the transfer takes place. Still, there is no time limit to reclaim the accounts and interest.
abandoned accounts in usa regulated by state laws. In most cases, an account is considered inactive after 3-5 years of inactivity. After that, the bank should try to contact the owner.
If none is found, the state – usually the state of the owner’s last known address – takes over the account. It is then lodged with an unclaimed property office, some of which publish public notices. In most cases, the owner can reclaim the property indefinitely.
Abandoned accounts: some countries keep cash
In France, banks must attempt to contact the owners, but after 10 years of inactivity, accounts and life insurance policies are transferred to a public financial institution, CDC.
The government provides a searchable database, but does not actively search for account holders. After 20 years the funds become property of the French state and can no longer be reclaimed.
Switzerland, known for its special banking regulations, has taken a similar, if longer, path.
In the Alpine nation, banks are expected to preserve assets and continue to manage dormant accounts in the best interests of customers. There is one in the country to help the owners Centralized database for such accounts.
After 60 years of no contact, the accounts information is published, and heirs have one year to claim them. After that, the claim is terminated and the account is liquidated and transferred to the government along with the contents of the safe-deposit boxes.
Keeping financial records up to date and sharing them with family can be a hassle, but it can mean the difference between a well-managed inheritance and money sitting in a forgotten account.
Edited by: Andreas Becker