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Senior checking not always good deal

By Claes Bell, CFA · Bankrate.com
Tuesday, August 14, 2012
Posted: 12 pm ET

Like the senior discount at Denny's or your local movie theater, senior checking accounts are pitched as a benefit to help older people stay within their sometimes limited budgets.

But senior checking accounts aren't always a better deal, according to a study by the Pew Research Center.

Last week, I wrote about a Pew study that examined student checking accounts and found them to be, on average, pretty good. Senior checking accounts, though, didn't fair nearly as well.

The study found that senior checking accounts basically fall into one of three categories:

  • Simple senior checking accounts: They offer a few minor freebies along with a basic checking account.
  • Low-cost/low-fee accounts: These give seniors more substantial benefits in the form of lower monthly maintenance fees and low balance requirements to avoid those fees.
  • Senior added-benefit accounts: There are higher balance requirements in exchange for benefits such as earning interest and waiving certain fees.

The first two categories of accounts offer real -- if minor -- benefits. But the last category can end up costing seniors big if they don't meet higher balance requirements, according to the report:

These accounts waive five fees that range from $1 to $10, some of which are for less common  items like a ministatement at an ATM. These charges may not be incurred frequently enough by the typical customer to account for substantial savings. Essentially, accounts of this type are a luxury account tailored for seniors, not necessarily an improvement on the basic checking package.

The upshot is that senior accounts are a mixed bag, and those looking to take advantage of any senior benefits need to read the fine print carefully before committing.

What do you think? Have you ever had a senior account? How did it work out for you?

Follow me on Twitter: @ClaesBell.

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