‘Safe accounts’ eliminate most fees

Money sticking out of bank book

Does it seem like fees and penalties are pricing you out of commercial banking lately?

The Federal Deposit Insurance Corporation feels your pain and hopes to do something about it.

The independent agency launched the one-year Model Safe Accounts Pilot program in January to test market a safe, low-cost transactional and savings account that cannot be overdrawn.

The pilot account combines an interest-bearing savings account and a card-based electronic account with free online and mobile banking, bill pay and electronic statements.

The account does not feature checking – you'll have to make withdrawals via an ATM, point-of-sale terminals or other electronic means – but it also completely eliminates costly overdraft and NSF fees. The pilot banks are allowed to charge a minimal maintenance fee of up to $3.

The goal of the pilot is to figure out how to best serve Americans with banking needs who can't afford banking fees – and a growing number of us fit that description.

According to the FDIC, an estimated 7.7 million Americans are "unbanked," meaning they have no bank account at all, while another 17.9 million are "underbanked," which means they have a bank account but also rely on nonbank financial options like payday loans to get by.

Clearly, these folks have been given the boot by the banking industry. And the problem is only getting worse as banks scrap free checking and conjure up new fees and penalties to recover the billions they expect to lose as a result of financial reform.

The FDIC will monitor volume, use, success and profitability of the pilot accounts quarterly and deliver their findings next year.

But finding an account could prove tricky. The far-flung pilots are being conducted in Bath, Maine.; New York City; Middle Village, N.Y.; Union City, Tenn.; Wilmington, Del.; New Orleans; Lincoln, Neb.; Glasgow, Ken. and Webster, Mass. You'll find the complete list of participating banks on the FDIC website.

If these "safe account" pilots make the grade, might banks be persuaded to offer them along with their higher-priced accounts? Jean Ann Fox, financial services director for the Consumer Federation of America, thinks so.

"There are ways that regulators can encourage people to do the right thing, and providing responsible basic transaction services to unbanked and underbanked consumers is an important agenda item right now," she says.

Follow Interest.com on Twitter.