How Unclaimed Money Collects Interest

How Unclaimed Money Collects Interest

How Unclaimed Money Collects Interest

A common question many people asked when confronted with the unclaimed money problem is how the money compounds interest. If the money is sent to the state or federal treasury and it just collects dust, how can that possibly involve interest charges? This is a great question and it’s one that requires us to delve into the process of how unclaimed money comes to be. The following should show you that interest on unclaimed money is not an uncommon thing and that means you may have much more money out there than you first imagined.

Interest on Unclaimed Money – Before It Becomes Unclaimed

Much of the interest that accrues on unclaimed money comes about when the money is still, so to speak, in the person’s possession. For instance, a person may have a savings account or a bond account that they don’t really do anything with. While they go on with their lives, this money starts accruing interest. It’s until the money is abandoned over time that it actually becomes known as unclaimed money. By that time, the interest stops accruing. So any interest that you find on your money, if lost through this type of example, will be interest that was charged before it went missing in the first place.

The States Put Unclaimed Money to Use

In some cases, the state will use its enormous unclaimed funds account to invest in low-risk securities account. This will also accrue interest on unclaimed money. While this practice may be legal for now, some unclaimed money owners don’t like it one bit.

These individuals don’t think it’s right that the government should be able to use their money without their permission to earn interest charges. There has been at least one class action lawsuit caused over this matter and the state in question was forced to pay the residents the interest earned while the money was considered unclaimed.

So you see that unclaimed money can earn interest in a number of ways. To find out if you have a sum out there or to find out if you’ve earned interest on unclaimed money, search with your first and last name and you’ll have your answer.