Billions of euros remain untouched in dormant bank accounts across Germany. With heirs unaware and no central registry in place, banks and politicians are debating who should ultimately have control over the funds.
While Germany is attempting to implement significant budget cuts, billions of euros are quietly sitting in banks and other financial institutions, unused and unnoticed in so-called forgotten accounts.
A 2021 report from the country's Research Ministry estimated that up to €4.2 billion ($4.9 billion) was held in such accounts. Other estimates are considerably higher, with some reaching as much as €9 billion. The banks themselves have not released any figures.
As people grow older, maintain multiple accounts, or pass away, relatives and heirs face difficulties in identifying accounts.
Online banking, which lacks paperwork or printed statements, makes this even more challenging because information is locked away in email accounts or on hard drives. Non-traditional financial assets such as cryptocurrencies or NFTs are even harder to keep track of.
What constitutes an abandoned account?
Sticking to traditional financial assets, abandoned, forgotten, or dormant accounts 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.
This absence of a legal framework has left the matter to the banks themselves, but most banks consider the following:
The account holder has died, and no heirs can be located.
There has been no customer contact for years.
Postal mail is returned, and other contact information is outdated.
This also gives banks leeway in how much they invest in searching for owners or heirs. One major obstacle is the country's strict data protection regulations.
How to locate abandoned German accounts?
In Germany, dormant accounts do not become the property of banks or get transferred to the government. Banks are required to keep these accounts indefinitely, and ownership—whether by the original owner or their heirs—never expires.
The German government can only claim an account if they are declared heirs under the country's inheritance law, not under any unclaimed property regulations.
The most significant measure needed is a central dormant account register that can be used to determine if someone held accounts anywhere, says Beatrice Eisenschmidt, a board member at VDEE, a Berlin-based association representing professional heir finders.
Currently, inquiries must be sent to various banking associations, a process that takes time and money. For heirs, it is usually a shot in the dark without knowing if there are any assets at all.
"For this reason, many heirs choose not to pursue these inquiries," Eisenschmidt told DW.
Attempts to establish a national registry
Nearly a decade ago, 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 dormant assets, and several attempts have been made since then.
The current federal government, headed by Chancellor Friedrich Merz, has introduced draft legislation to create a central, publicly accessible online register where heirs can search for information. But so far, no new regulations have been passed.
What to actually do with the money remains uncertain.
A recent survey commissioned by 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, while only 8% think it should go to the government and 2% think the banks should keep it for themselves.
Abandoned accounts: Always retrievable in some countries
In the UK, dormant accounts are transferred to a reclaim fund, not the government, typically after 15 years. The fund is intended to support social and environmental projects. But the money can be reclaimed indefinitely.
Ireland has a similar timeframe, but there the money is transferred to the treasury, which also uses it for social projects. Institutions are required to publish a notice in two national newspapers before a transfer takes place. Still, there is no time limit on reclaiming accounts plus interest.
In the US, abandoned accounts are regulated by state laws. In most cases, an account is considered dormant after three to five years of inactivity. After that, the bank must attempt to contact the owner.
If no one is found, the state—usually the state of the owner's last known address—takes custody of the account. It is then held in an unclaimed property office, some of which publish public notices. In most cases, owners can reclaim the property indefinitely.
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Abandoned accounts: Some countries keep the cash
In France, banks must attempt to contact owners, but after 10 years of dormancy, accounts and life insurance policies are moved to a public financial institution, the CDC.
The government provides a searchable database but does not actively search for account holders. The funds become the property of the French state 20 years later and can no longer be reclaimed.
Switzerland, known for its special banking rules, has taken a similar, if longer, approach.
In the Alpine nation, banks are expected to preserve assets and continue managing dormant accounts in the clients' best interests. To help owners, the country has a centralized database for such accounts.
After 60 years of no contact, information on the accounts is published, and heirs have one year to claim them. After that, claims lapse, and the account is liquidated and transferred to the government, including the contents of safe-deposit boxes.
Keeping financial records up to date and sharing them with family may be a hassle, but it could mean the difference between a well-managed inheritance and money sitting in a forgotten account.
Edited by: Andreas Becker
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