Difference Between Inactive and Dormant Accounts

Aspect	Inactive accounts	Dormant accounts
Account status and implications	They may be subject to maintenance or other fees charged by the bank. These fees are designed to cover the administrative costs associated with maintaining the account, even though it is not generating significant activity.	Banks may take additional measures, such as freezing the account funds, limiting access to the account, or requiring specific documentation and procedures for reactivation.
Interest accrual and fees	Interest may still accrue as per the account's terms and conditions. However, maintenance or other fees may be deducted from the account balance.	Interest accrual may cease altogether. Additionally, banks may impose additional fees specific to dormant accounts or charge reactivation fees if you wish to regain access to the funds.
Unclaimed funds	There is no mention of the funds being transferred or considered unclaimed. The focus is on maintenance or other fees being charged by the bank.	For dormant accounts that remain inactive for an extended period (the timeframe varies by jurisdiction), banks may be legally required to transfer the funds to the Depositor Education and Awareness Fund maintained by the Reserve Bank of India.
Reactivation process	To reactivate, you typically need to initiate a transaction, such as making a deposit or withdrawal, or contact your bank directly to express your intention to continue using the account.	The reactivation process is a little more complex. For example, to reactivate a dormant Savings Account at Axis Bank, you need to submit the application form, along with your KYC details.