The Chicago Tribune recently carried an article that caught my attention. The article entitled “5 Senior Discounts to Avoid” was written by Cameron Huddleston of the Kiplinger Group.
The most disturbing part of the article was the section labeled “Checking Accounts”. It carried a warning to seniors to compare senior checking accounts to that of the financial institution’s basic checking account. The writer cited to the findings of a study performed by the Pews Charitable Trust which reviewed the checking accounts offered at the 12 largest banks and 12 largest credit unions. The Pew’s study found that some senior accounts actually cost more than basic accounts unless the customer maintains a high balance.
The article did not provide the names of the institutions or specifics on the accounts that were reviewed. To get additional information I looked up the Pews Charitable Trust and searched for the report titled “Still Risky; An Update on the Safety and Transparency of Checking Accounts” conducted as part of the Pew Safety in Checking in the Electronic Age Project.
The study of the 24 institutions found that 5 of them ( four banks and one credit union ) marketed special accounts tailored for seniors. A comparison was made between senior accounts and basic checking accounts. The findings indicated that in some instances seniors were paying more for their checking accounts unless they maintained a specific, higher balance in them. In one of the comparisons senior account customers could expect to pay between $156 and $300 more per year in monthly fees if they failed to maintain a $5,000 balance.
This sample is very small and can hardly be said to represent a trend or actual practice in the product offerings at the financial institutions. However, it points a finger and gives seniors concern that they are not being given a fair deal.
Credit unions need to take the lead when it comes to providing seniors the best and most economical products to meet their financial needs. Seniors help build credit unions across this country and remain some of their best customers, keeping millions in savings at these institutions.
Transparency and full disclosure must be foremost when advising seniors on checking accounts or any service they may need. In terms that are easily understandable, credit unions should provide information on fees, terms, conditions and required balances. At www.pewtrusts.org/safechecking, Pews has provided a model to use that provides transparency for checking account offerings.
See if it helps and works for you.