While some dread the idea of growing older, others are excited about the idea of aging — gracefully so — and look forward to the rewards they will receive upon reaching retirement age. There’s no doubt that whether you’re taking advantage of senior discounts at restaurants, or enjoying a low-cost movie, being a senior citizen has its financial perks.
But recent reports show that these perks aren’t always offered from banks. In fact, a recent study has found that senior checking accounts may not be beneficial at all.
Elderly Short-Changed With Senior Checking Accounts
Most senior checking accounts are not providing the same benefits seniors receive when taking part in other senior-based programs. In fact, a report released in August by the Pew Charitable Trusts reveals that many elderly customers are forced to pay more for comparable accounts.
In the report, Still Risky: An Update on the Safety and Transparency of Checking Accounts, the Pew Safe Checking in the Electronic Age Project took a look at checking accounts offered by the 12 largest U.S. banks and 12 largest credit unions.
Of the financial institutions in the study, five of them (four banks and one credit union) offered special checking accounts that were tailored for seniors. Simple senior checking accounts were found to be very similar to basic checking accounts at these institutions. But in some cases, seniors were actually being charged more for their senior-specific checking features.
According to the study, one of the biggest charges came from monthly checking account fees. The average basic checking account charged $12 per month when anywhere from $0 to $1,500 was maintained in a checking account. On the other hand, a senior checking account charged $25 per month for maintaining this amount in their account.
In fact, it took a balance of $5,000 for seniors to avoid paying a monthly service fees in most senior accounts. The dollar amount to avoid a monthly fee in the basic accounts? $1,500. That’s quite a difference.
AARP Education and Outreach Senior Project Manager, Sally Hurme, recommends that seniors seek out the best offers before opening a senior checking account.
“Wise consumers should shop around and compare senior accounts,” says Hurme. “Make sure your package is better than the one down the street.”
You may be wondering where exactly the perks are for seniors who acquire a senior checking account. Special features like earning interest on their accounts, as well as waivers of other fees are what entice seniors into taking on this type of checking account. But if seniors don’t take advantage of these perks, they are simply left with the responsibility of maintaining up to $5,000 in their accounts to avoid fees.
Bottom line - make sure you do your due diligence before opening a senior checking account. If you do want to open a senior checking account, make sure you are getting a better deal on the senior checking account than a standard checking account!