Savings Account: Why?

Monday, August 09, 2004
The other day I noticed that I was getting charged $10 from savings account. I had never been charged before but that is because I had kept a minimum amount of money required by that account. I had decided to move the money to another higher-interest account and accidentally let it slip below the minimum requirement threshold.

My question is why are there even financial instruments like this? Does anyone actually have a savings account that has a minimum required balance and they keep it below that minimum? There is no way that the interest payment on the account is gong to make up for the $10 monthly service charge so you are basically giving money away so the bank can hold and "protect" your money.

It infuriated me so much (more at myself for letting it happen than at the bank) that I closed the savings account and opened another one at a different institution that does not have a minimum balance requirement and pays a much higher interest rate.

3 comments:

Jen said...

Yeah Terrence. You show that company for trying to make money. How dare they?

I agree that savings accounts are dumb. I do move my money into higher interest accounts, but I also keep an eye on the minimum balance.

Did the bank give you your $10 back in an attempt to rescue you as a customer? This bank wouldn't happen to rhyme with Shmells Shmargo, would it? I can't stand them.

T said...

Is that a comment criticizing my ideas about capitalism and people making money. I think that might be the first time anyone questioned my capitalistic credentials. :)

If you notice however, I was not saying bad anything about the bank trying to make money. I was mad at myself for allowing myself to mismanage my money. I believe that the best way to handle such things is to vote with your money so therefore I did like I wrote, I closed that account.

My point was I just don't understand how other consumers would continue to have such a bank account.

Anonymous said...

I agree w/ you - I'm always checking out the fees and then figuring if the minimum balance is worth it etc. I try to never pay bank fees and always get the best interest. And I NEVER pay ATM fees. Can't stand to pay a fee to get my own money out of the bank.

Susan..on a different computer so couldn't sign in since I don't remember the password