More often than not people park their money in several instruments to fulfil their financial commitments and fetch returns. Some part of the investment such as EPF is mandatory and others such as debentures, fixed deposits are optional.
But you will be surprised to know, nearly Rs 70,000 crore is lying unclaimed in various kind of accounts in the country. Investors have parked their money in stocks, insurance policies, provident funds and seem to have forgotten all about it. We look at several accounts where funds are lying unclaimed and steps needed to reclaim such funds.
Rs 43,000 crore in inoperative accounts with EPFO
Every year, you deposit a certain portion of your salary in employees provident fund organisation (EPFO). EPFO is among the world's largest social security organisation. Currently, it operates more than 15 crore accounts.
Around Rs 43,000 crore is lying unclaimed in inoperative accounts with the EPFO. If you too have idle funds lying in dormant provident fund accounts, then it's time that you should reclaim such funds.
A dormant account is the one in which no amount has been deposited in over 36 months. Usually, account gets dormant when the employee has not transferred his old account to the new employer and forgets about the previous contributions.
If you want to claim EPF funds, there are two options.
1. Withdraw funds
You should ideally withdraw your funds after five years of the EPF account opening. For this, you have to download the claims form from the EPFO website, fill it and submit it at the nearest EPF office in person or through post. Once EPFO processes your claims form, the funds will be transferred to the bank account you mentioned in the form.
2. Transfer funds to current EPF account
You can also transfer funds to existing EPF account. This option is suitable for those whose EPF accounts are less than five years old. That's because withdrawal from PPF accounts lesser than five years old will attract taxes in form of tax deducted at source (TDS). If the account is older than five years, no taxes will be deducted on withdrawal.
Rs 9,100 crore as unclaimed and unpaid dividends, matured deposits and debentures
There are instances when investors misplace their share certificates or miss dividend announcements. They may also tend to forget about their investments during a longer duration of time.
Firms also send out dividend warrants to shareholders. If investors don't encash them within 30 days, the money is transferred to another account and categorised as unclaimed dividend in the annual report.
After seven years, this account is transferred from the company to Investor Education and Protection fund.
In order to get this amount back, you should write to the registrar of companies and share transfer agent informing about the missed dividend, stock folio number and date of purchase. You should give your bank account details for direct transfer.
Rs 11,668 crore as unclaimed amount of policyholders with insurers
With a large number of private insurers and public sector behemoth LIC catering to the needs of the Indian population, cases such as policy benefits paid out but not encashed by policyholders, maturity benefits lying unclaimed or death claims not filed by nominees are very common.
Insurance companies hold these types of funds for a long time but they don't pay any interest on such amounts since investors then might make it a habit to forget matters related to such policies.
In case of death of the policyholder, one should file death claims as soon as possible.
If you have the policy number and documents, you should approach the branch from the policy was bought. In case, you are staying in a different city, you can take help of an agent or approach the zonal officer.
Keep a record of the policies and do inform your family numbers about them. Also, mention a nominee in the insurance document and inform the same to the person concerned.
Rs 1,916 crore in dormant savings account
If there is no transaction in your savings account for two years, the bank will deem it inoperative.
This account will have restrictions for several transactions including ATM withdrawal, internet or phone banking, issuing new cheque books, etc in order to ensure the safety of accountholder's money.
In order to reactivate such account, you can submit an application along with identity proof and passbook or cheque book to your bank, stating the reasons for absence of valid transactions.
The bank will start KYC formalities afresh and will usually put the account in active mode within 24 hours.
There is no reactivation charge on a dormant account.
Rs 5,000 crore plus in bank deposits
With Rs 5,000 crore plus amount lying in 1.33 crore bank accounts, the task to return these funds to their right owners is cumbersome.
If you too have forgotten your money in a bank deposit, you can claim it along with interest after maturity of the instrument. In such case, you will get back savings rate from the amount of maturity. In case you reinvest the proceeds into bank deposits, you will get the applicable rate of interest.
After 10 years of maturity, the money is transferred into unclaimed money account.