What are Senior Checking Accounts?

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!

BBVA Compass Tops 5 Year CDs

BBVA Compass's standard 5 year CD is currently offering a high CD rate of 2% APY. This is amongst the best CD rates available for certificates with 5 year terms.

This certificate of deposit offered by BBVA Compass Bank, a very large financial institution headquartered in Birmingham, AL with 597 branch locations. Money deposited in this CD is FDIC insured up to $250,000 per depositor.

A recent review of BBVA from one of our readers:

Rick Casey writes:

I’ve been using Compass Bank for over five years now and I have had nothing but a good experience using their services. Their banking locations, hours and staff have all ways been very acceptable. Many times I’ve spoken to their staff about financial products I am interested in and they have helped me find solutions. The tellers at both the counter and the drive through have been very enjoyable to work with as well, even when the lines are quite long, they do make the effort to get you on your way quickly.

One time I needed an unsecured loan to help pay for a credit card which raised my interest rate suddenly. I walked into my local Compass Bank location and was greeted by one of their staff immediately. We spoke about my situation and he offered a solution to help me cover the balance of the credit card which a product of theirs. He was very empathetic about the situation and was able to speak to his management to arrange a loan for me. He drew up the terms and I signed the loan agreement that afternoon. Phenomenal service!

I was very thankful for their help and I would definitely recommend my bank to anyone who was interested.

Citibank CD Rates

If you have $10,000 or less in savings you may want to invest in a certificate of deposit instead of a regular savings account.

Citibank is a solid bank that has consistently provided high quality services to it's customers. Among their offerings include savings accounts, debit and credit cards, mortgages, loans, checking accounts, and many more. Citibank is a leading bank globally with 200 million client accounts and it does businesses in over 160 countries.

Citibank’s certificate of deposit is a great deal for those who have amounts of $10,000 and less. Citibank features average CD rates, but with a greater feeling of stability because it is such a big bank.

Citibank's current CD rates include .15% for short term CDs, up to .75% on long term CDs. Again, they aren't the best CD rates available but you can rest assured that your deposit will be safe with Citibank.

Doral Bank Direct CD Rates

Doral Bank Direct continues to offer competitive CD rates on it's short term CDs, particuarly the 6 month and 9 month certificates. The current rates on these CDs are 0.92% APY 6-month CD and a 0.97% APY 9-month CD. Its 18-month CD is also near the top of the rate charts with a 1.10% APY. Minimum deposit is $1,000.

The "Open an Account" link at this Doral Bank Direct page will take you to an application in which you can open and fund the CD. Funding can be done with an ACH transfer from an existing checking account. The CD rate locks when you submit the application.

The online application allows you to specify up to 3 beneficiaries. One nice thing about this beneficiary section is that it doesn't require the beneficiaries' social security numbers. The only required fields are the beneficiary name, relationship and percentage amount.

If you have experience with internet CDs, you know it's important to learn the details for not only opening the CD, but also the details for closing the CD at maturity and receiving the funds. Below are the details I received from Doral Bank Direct for closing a CD at maturity:

Upon maturity of the CD, you will receive a maturity notice. If you choose to move the funds at that time, we would ask that we receive written notification from you. We welcome notification by fax, mail, or an attachment to an email.

Upon maturity, we will be happy to ACH funds into an account we received by online application. However, if the application was received by mail, we would use a check to distribute funds.

The early withdrawal penalty will be accessed based on the term of the deposit - 90 days simple interest for terms less than 1 year; 180 days simple interest for terms of 1 year or longer. Early withdrawal penalty is calculated on the amount of the amount withdrawn. The disclosure gives the bank the right to refuse an early withdrawal.

If you plan to use interest from the CD as income, you can have it paid monthly, semi annually or annually.

Bank of America's Interest Rates - 2012 Update

So far, Bank of America's CD and savings account rates in 2012 are pretty abysmal. The best CD rate available is currently their 10 year CD, which yields 2.30% APY, meaning you won't even beat inflation.

Their promotional offers probably offer the best deal as far as Bank of America products go, but to be honest they are still quite terrible. You can get far better rates at your local credit union or with an  an online CD.

Promotional CDs and IRA CDs:

  • 9 month CD yielding 0.30% APY with a minimum deposit requirement of $5,000 for standard deposits and $2,000 for retirement accounts.
  • 12 month CD yielding 0.45% APY with a minimum deposit requirement of $10,000 for standard deposits and $2,000 for retirement accounts.
  • 18 month “Opt Up” CD yielding 0.55% APY with a minimum deposit requirement of $10,000. This product is only available as a standard CD. After 6 months you have a one-time option to raise the rate for the remaining 12 months. The new rate will be based off of current market conditions at that time.

Regular CDs (2012 Edition):

  • 7 to 89 day CD yielding 0.25% APY.
  • 90 day to 23 month CD yielding between 0.28% and 0.35%.
  • 2 year to 35 month CD yielding 0.40% APY.
  • 3 year to 47 month CD yielding 0.60% APY.
  • 4 year to 59 month CD yielding 0.85% APY.
  • 5 year CD yielding 1.10% APY.
  • 10 year CD yielding 2.30% APY.

One thing to note is that BofA automatically renews their CDs with the same duration if you do not opt out once the term is up. There is also an early withdrawal penalty for all these CDs.

Bank of America savings and money market accounts have laughable rates - the only reason you would keep your money in a BofA savings account is because they are "Too Big to Fail."

Dime Savings Bank (NY) CD Rates

Dime Savings Bank continues to have high mid term and long term certificate of deposit rates:

  • 12 months           0.70% APY
  • 15 months           0.85% APY
  • 18 months           0.90% APY
  • 2 years               1.25% APY
  • 3 years               1.55% APY
  • 4 years               2.00% APY
  • 5 years               2.50% APY
  • 7 years               3.00% APY

You can start enjoying this highest CD rates when you make an initial deposit of $500 to open an account. You can also manage your account at your own convenience by enrolling to online banking. Current CD rates are subject to change without prior notice.

In case you decide to withdraw money before the maturity date, you will have to pay for the early withdrawal fee. The earnings of this money in the bank is compounded daily and paid on a monthly basis or on the maturity date. The bank will automatically renew your certificate of deposit account once it matures, so make sure to inform the bank if you want to withdraw your money at least 10 days after the maturity date.

You can take advantage of this top CD rates by completing the application form online. You can also call customer service hotline in case you have other questions with regard to current certificate of deposit rates or requirements that you will be needing to open an account thru 800-321-3463.

The bank has offices located in the cities of Williamsburg, Whitestone, Westbury, Valley Stream, Sunnyside, Soundview, Port Washington, Midwood, Merrick, Marine Park, Long Island City, Kings Highway, Jackson Heights, Hillcrest, Greenpoint, Glen Oaks, Garden City Park, Flushing, Cedarhurst, Brooklyn Heights, Boro Park, Bensonhurst, Bellmore, Bayside, and Bay Ridge in the state of New York.

Dime Savings Bank was established in 1864. Currently, they have reached over $4.13 billion in assets. The bank is also insured by the Federal Deposit Insurance Corporation with certificate number 16012.

US Treasury to Stop Selling Bonds at Banks/Credit Unions

The U.S. Department of the Treasury said it will no longer sell paper savings bonds through financial institutions such as banks and credit unions as of Jan. 1, 2012. The move is part of the Treasury’s goal to increase electronic transactions with citizens and businesses and will save taxpayers about $70 million over the first five years.

Series EE and I savings bonds will still be available for purchase TreasuryDirect, which has offered savings bonds since 2002. “Savings bonds are very much a part of this country’s history and culture, and will remain a part of America’s future - but in electronic form,” said Public Debt Commissioner Van Zeck. “It’s time for us to take a 1935 model and make it a 21st century investment tool.”

It is free to open an account at TreasuryDirect. Services offered through the site include:

  • Buy, manage and redeem savings bonds
  • Convert paper Series EE and I savings bonds to electronic form
  • Purchase savings bonds as gifts
  • Enroll in a payroll savings plan for purchasing bonds
  • Invest in other Treasury securities, such as notes, bills and TIPs

If you still have paper savings bonds you can continue to redeem them at financial institutions.

Eloan CD Rates

E-loan has a CD rate of 1.26 percent annual percentage yield (APY) for a 1-year term. The interest rate on this certificate of deposit is current as of June 1, 2011, and can change at any time. Other online CD rates and terms include:

  • 1.05 percent APY for 9 months
  • 0.75 percent APY for 18 months
  • 1 percent APY for 2 years
  • 1.15 percent APY for 3 years
  • 1.35 percent APY for 4 years
  • 1.9 percent APY for 5 years
  • 2 percent APY for 6 years

Shorter certificate of deposit terms than those listed are also available. You’ll need a minimum of $10,000 to open a certificate of deposit at E-loan. The CD rates assume that the principal and interest will remain on deposit for the full term. Early withdrawal of funds results in a penalty fee.

E-loan also has an online savings account with tiered savings rates. The rates include:

  • 0.2 percent APY for balances of $5,000 to $9,999
  • 0.5 percent APY for $10,000 to $24,999
  • 0.55 percent APY for $25,000 to $49,999
  • 0.6 percent APY for $50,000 to $99,999
  • 0.65 percent APY for $100,000 and up

E-loan offers banking services nationwide. It is a wholly-owned subsidiary of Banco Popular North America. Accounts are insured by the Federal Deposit Insurance Corp.

KeyBank Checking Bonus - Free iPod Touch Promotion

KeyBank has a new checking account promotion with an iPod touch bonus. This offer is only available online to certain areas.

Here are the requirements to qualify for the iPod touch gift:

  • Open a qualifying KeyBank checking account online and enter offer code ONTT0311 by June 24, 2011
  • Make at least 10 payments and/or purchases per month for 3 months after account opening
  • Make 3 direct deposits each of $500 or more within 3 months of account opening

The comparison chart tab in the promotions page shows the qualifying checking accounts. All have potential monthly service charges. The account that is easiest to avoid monthly fees is Key Express Checking. You can avoid fees by making at least $500 in deposits or initiating five transactions per statement cycle.

Here's the small print from the offer:

Limit one gift per qualifying account. Limit one gift per individual. The value of your gift will be reported on Form 1099-INT. Your gift will be shipped within 90 days of meeting requirements. Qualifying purchase and payment transactions include checks, MasterCard signature, PayPass and PIN-based purchases, Key Bill Pay, debit card automated payments, PayPal transactions, and Automated Clearing House (ACH) direct payments. Direct deposit transactions are limited to payroll, Social Security, pension, and government benefits. Offer available to individuals without an existing checking account at KeyBank as of 3/25/11. Offer not available to individuals who have opened a KeyBank checking account in the last 12 months.

There are some additional details in the promotion's FAQs.  If you close your account within 180 days of account opening, you will be charged a $25.00 account early closure fee.

When you apply online, you have to enter your zip code. Not all zip codes are accepted. Like previous KeyBank promos, it appears to be only available in areas where they have branches. KeyBank branches are located in the following states: Alaska, Colorado, Connecticut, Idaho, Indiana, Kentucky, Maine, Michigan, New York, Ohio, Oregon, Utah, Vermont, and Washington.

The offer expires on June 24, 2011. Visit the promotions page for more information.

 

April 2011 Shows Strong Job Gains

U.S. employers added jobs in April, according to the U.S. Department of Labor. Gains in employment were spread across various industries, with nonfarm payroll employment adding 244,000 jobs and the private sector adding 268,000.

Secretary of Labor Hilda L. Solis said in a statement:

April’s broad-based job gains were the largest we have seen in 11 months. Our economy has now seen private sector job gains for 14 months running. During this period, we have added 2.1 million private sector jobs, including 760,000 in the last three months alone. We have crossed an important threshold by creating more than enough jobs in each of the last three months to outpace growth in the labor force and put unemployed Americans back to work.

Despite the gains, the overall unemployment rate rose slightly to 9 percent from 8.8 percent.