Special accounts: Banks create niches for all ages
By Laura Bruce • Bankrate.com

For teenagers to retirees and everyone in between, many banks, thrifts and credit unions have niche accounts supposedly designed to meet your needs and help you achieve a goal.

We say "supposedly," because some financial institutions just slap a name on an account and offer the bare-bones minimum, while others go several steps beyond. As with any banking product, you'll need to shop around to find the best.

For instance, there are plenty of institutions that offer special accounts for children. Most require a minimum balance of just $1 to $5 and make some effort to teach kids about managing their money.

No doubt about it, this requires a lot of paperwork for very small deposits -- the institutions are banking on mommy and daddy making big deposits, having a mortgage, a loan and a credit card with the bank, too.

Kid accounts
United Bank, headquartered in Vienna, Va., goes the extra mile. Kids 12 and under can open an account with just a buck. They get a coupon book with 25 $2 coupons -- which they can deposit, one coupon per quarter. Although it's spread over six years, the bank is giving kids $50 they can plunk in their accounts.

"We put it together so that kids, no matter what their financial status, would be able to learn how to save," says spokeswoman Paulette Cross. "They always have something so they can learn to go to the bank and save."

In addition, United Bank gives children's accounts a slightly higher interest rate than its accounts for adults, so those tiny deposits grow a little faster.

As children get older and need checking services, financial institutions try to develop products that will keep them as customers for years to come, says First Union's Lorraine Fischer.

"That's the hope. We try to have the products they need throughout their life cycle."

Student accounts
First Union's Express Checking for students is aimed at doing that.

"We offer all types of deposit products plus branch banking," says Fischer. "We'll also have a four-part college micro site on our Web page by the end of the month. It'll have money management tips for getting ready for college, while in college, and graduating from college -- plus a section for parents on how to prepare your children for college."

First Union's student checking account offers a tempting deal to students who don't feel the need to visit tellers. There is no minimum balance required; unlimited check writing, no monthly service fees and no per check fees.

If the student's parents also bank with First Union, the student gets four ATM withdrawals, inquiries and transfers -- 12 transactions in total -- at non-First Union ATMs per month. All the student has to do is agree to bank online, by phone, or through ATM.

Senior accounts
Accounts for older consumers are growing in popularity.

A 2001 survey by the American Bankers Association shows that 71 percent of banks with assets under $500 million offer senior citizen checking accounts while 39 percent offer student/youth checking accounts.

Sixty-nine percent of large banks -- those with assets over $500 million -- offer senior checking while 19 percent offer student/youth checking accounts.

When it comes to accounts for seniors, one of the most obvious differences is at what age they start. Some institutions, such as Oceanside Bank in Jacksonville, Fla., allow people to sign up for a seniors account at age 50, while others have a minimum age of 60 or 65.

Oceanside Vice President June Williams says they offer a free checking account at age 50 because that's when AARP, the nonprofit lobbying organization that represents millions of older Americans, begins accepting members.

You might think people who are 50 wouldn't especially like being called seniors.

"A lot of people say they don't mind being called a senior if they get a free account -- plus, we have free coffee in the lobby," says Williams. Now, that's driving a hard bargain.

Boomer accounts
One of the more unusual niche accounts is the boomer account offered through San Diego-based Bank of Internet. It's for the so-called "sandwich" generation.

President Gary Lewis Evans says it's meant to help people manage their children's accounts -- or their parents' -- while they manage their own.

"My wife and I have three children, ages 15 to 23. Through the Internet we manage our accounts and can oversee our children's," says Evans. "My two daughters are going to Europe this summer. If there's an emergency, we can transfer money to them anywhere in the world and they have immediate access at an ATM or through a Visa check card."

Evans says he also uses the account to assist his parents.

"Of course, it's a very different situation helping parents and helping kids. With the kids it's a financial management experience. We sign on to their accounts -- have legal access. We can see their accounts but they can't see ours."

The minimum age to open a boomer account at Bank of Internet is 45.

Some financial institutions are clearly more innovative than others when it comes to special accounts. The only account that's really worthwhile is the one that meets your needs.

If you're a student or a senior and are looking for free basic checking, you'll probably find a bank in your neighborhood that will fit the bill. But if you want a nice lineup of perks, it's probably worthwhile to do an online search -- perhaps opening an online banking account.

Students should check first with their parents' bank. A couple extra perks might be thrown in for making banking a family affair.

No matter what kind of account you're considering, compare not only with other institutions but also with other accounts within that facility.

Some banks may offer free student or senior checking with no minimum balance, but may limit the number of checks you can write per month. That same bank might offer a free, regular checking account with no restrictions on the number of checks written if you maintain a $300 minimum balance.

You're the only one who will know which account is the better deal for you.

-- Updated: May 8, 2002