The Australian government is tightening regulations around bank account closure rules 2025, aiming to speed up the process of dealing with inactive accounts. Starting next year, banks will be required to close or report dormant accounts sooner than before, shifting how savings and unclaimed funds are managed across the country.
The update is part of broader financial reforms designed to improve transparency, reduce fraud, and ensure that forgotten funds are either returned to customers or managed by the government responsibly. If you have any unused bank accounts, it’s important to understand what’s changing—and how you can avoid losing access to your money.
Inactive Bank Accounts to Be Closed Faster in 2025
Detail |
Information |
|---|---|
Rule Effective From |
January 1, 2025 |
Inactivity Threshold |
3 years (reduced from 7 years) |
Applies To |
Savings and transaction accounts |
Customer Notification Period |
30 days before closure |
Government Authority Involved |
Australian Securities and Investments Commission (ASIC) |
Official Website |
Reduced Inactivity Period
Under the new bank account closure rules 2025, any bank account—whether savings or transaction-based—that shows no customer-initiated activity for three consecutive years will be classified as inactive. Previously, the threshold was seven years.
What Qualifies as Inactivity?
An account is considered inactive if it has:
-
No deposits or withdrawals made by the account holder
-
No customer contact with the bank regarding the account
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No response to account-related communication
Regular automatic transfers or bank charges do not count as activity.
Customer Notice Requirements
Before closing or transferring a dormant account, banks are now legally required to:
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Notify the account holder at least 30 days in advance
-
Offer the chance to reactivate the account
-
Provide clear instructions to retain access or transfer funds
These customer notice steps aim to prevent confusion or financial hardship, especially for vulnerable customers.
What Happens to Dormant Savings?
Transfer to ASIC
If an account remains inactive after the notice period, the funds will be sent to the Australian Securities and Investments Commission (ASIC) as unclaimed money. Individuals can still reclaim this money later by filing a claim through the ASIC unclaimed money register.
Reclaiming Funds Later
Funds transferred to ASIC do not disappear. They are held securely and can be reclaimed by providing:
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Proof of identity
-
Evidence of ownership of the closed account
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A completed application through ASIC’s official platform
Why the Rules Are Changing
Fraud Prevention
Shortening the inactivity period helps banks identify suspicious or potentially fraudulent accounts sooner, reducing the risk of misuse.
Encouraging Active Banking
By speeding up the treatment of dormant savings, the government encourages individuals to consolidate their finances and keep their banking records up to date.
Administrative Efficiency
Handling inactive accounts sooner allows banks and regulatory bodies to manage account data more efficiently and reduce administrative backlogs.
FAQs
When do the new bank account closure rules 2025 take effect?
The updated rules take effect from January 1, 2025.
What is considered an inactive bank account under the new rules?
Any account with no customer-initiated activity for 3 consecutive years.
Will I be notified before my account is closed?
Yes, banks must notify you at least 30 days before taking any action.
Can I stop my account from being closed?
Yes, performing a deposit, withdrawal, or contacting your bank about the account will reset the inactivity timer.
What happens to my money if my account is closed?
The funds are transferred to ASIC, where you can reclaim them at any time.
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