Senior checking accounts can be more penalty than perk
A new study by the Pew Research Center indicates that seniors may be better off avoiding high-end checking accounts that are specifically designed for them.
In the study, Pew examined four of the largest banks and one credit union with special checking accounts tailored to seniors and compared them with each institution's most basic checking account.
Three types of senior accounts emerged in the study.
The nonpartisan research center based in Washington, D.C., found that the simplest senior accounts aren't that different from basic checking accounts -- and only slightly cheaper.
Another type of low-cost, low-fee account can actually save seniors $48 to $96 a year as long as they’re able to maintain a modest minimum balance of around $250.
But more elaborate senior accounts, which typically offer free additional services, can cost considerably more than basic accounts.
Bank of America, for example, requires seniors to pay a $25 monthly fee for their Advantage for Seniors account, which is $13 more than basic MyAccesss Checking.
To have that fee waived, seniors must maintain a hefty minimum balance of $5,000 while basic checking account customers only need a minimum balance of $1,500 to avoid monthly fees.
Seniors who wind up paying that monthly fee will spend $156 to $300 a year more for these accounts, Pew says, because the free services they receive won’t offset the additional cost.
"Essentially, accounts of this type are a luxury account tailored for seniors, not necessarily an improvement on the basic checking package," Pew concludes.
You can see the full Pew Center report here: