Billions of euros lie untouched in inactive bank accounts in Germany. Heirs are often unaware of their existence and there is no central registry. What should be done with this money?
More than four billion euros are said to be “sleeping” in Germany, in banks and other financial institutions, in so-called “forgotten accounts,” according to a report by the Ministry of Research from 2021. In some cases, it could be even higher – other estimates say up to nine billion euros. The banks themselves have not yet published figures.
In the event of death, it is often not easy for relatives and heirs to find such accounts, especially since many people have several accounts. Assets are especially difficult to trace when, due to online banking, there are no written documents or printed account statements, as the information is stored in emails or on hard drives. Non-traditional assets such as cryptocurrencies or NFTs are even more difficult to track.
WHAT ARE DORMANT ACCOUNTS?
In Germany, there is no official definition for these accounts. Abandoned, forgotten or dormant accounts are usually bank deposits or securities – such as stocks and bonds – for which there has been no activity for a long time. These accounts can remain inactive for years.
Since there is no clear legal framework, how to handle these accounts is largely left to the banks. Most institutions consider accounts dormant when the account holder has died, no heirs can be found, there has been no contact for many years, mail is returned, and other contact details are outdated.
This situation also gives banks some leeway in terms of the intensity of their search for owners or heirs. A major obstacle is the strict data protection regulations in Germany.
HOW CAN ABANDONED ACCOUNTS BE FOUND IN GERMANY?
In Germany, dormant accounts are neither owned by banks nor transferred to the state. Banks are obliged to hold these accounts indefinitely, and ownership rights – whether of the original owner or of the heirs – do not expire. An account can only be claimed by the German state if it is declared an heir under inheritance law. It cannot be transferred to the state based on the rules on ownerless assets.
According to Beatrice Eisenschmidt, a board member of the Berlin-based German Association of Heritage Researchers (VDEE), the most important measure would be to create a central registry for dormant accounts. Such a registry would help determine whether a person had an account somewhere.
Currently, applications have to be made to various banking associations, which is time-consuming and expensive. For heirs, this is often a hopeless endeavor, as they sometimes do not even know whether assets exist. “For this reason, many heirs give up on these searches,” Eisenschmidt tells DW.
EFFORTS TO CREATE A NATIONAL REGISTRY
Nearly a decade ago, Norbert Walter-Borjans, then finance minister of the state of North Rhine-Westphalia (NRW), estimated that around two billion euros were in dormant accounts in Germany. He called for the creation of a national register of dormant assets.
Since then, there have been several attempts to create such a registry. The current federal government under Chancellor Friedrich Merz has introduced a bill that would create a central, publicly accessible online registry where heirs can search for information. So far, however, no new rules have been adopted. So it remains unclear what will be done with this money.
Dormant accounts: in some places they can be searched at any time
In the United Kingdom, dormant accounts are usually transferred after 15 years to a fund called the “Reclaim Fund,” but not to the state. This fund is used to support social and environmental projects. Heirs, however, have the right to claim the money without a time limit.
In Ireland, after a similar period, money from dormant accounts is transferred to the state, which must use it for social projects. Before the transfer, institutions are required to publish notices in two national newspapers. Here too, there is no deadline for claiming the money from heirs, including accrued interest.
In the US, federal state laws govern the treatment of these accounts. In most cases, an account is considered dormant after three to five years of inactivity. The bank is then required to contact the account holder. If no one is found, the account is transferred to the appropriate state, usually the state of the holder’s last known address. It is administered by an “unclaimed property” office, and notices are sometimes published. In most cases, owners can claim their assets without a time limit.
IN SOME COUNTRIES, THE MONEY GOES TO THE STATE
In France, banks are required to try to contact account holders. After ten years of inactivity, accounts and life insurance policies are transferred to a public financial institution, the Caisse des Dépôts (CDC). The government provides a searchable database but does not actively search for owners. After another 20 years, the funds become the property of the French state and can no longer be claimed.
Switzerland, known for its specific banking rules, follows a similar approach. Banks are expected to safeguard assets and manage dormant accounts in the best interests of their customers. To help heirs, a central database of these accounts exists. After 60 years of no contact, the information is published and heirs have one year to file claims. After that, the rights are extinguished, the account is closed and passes to the state – including the contents of the safes. (DW)