Yes Virginia, There Can Be A Free Lunch

It’s been said that “there is no free lunch” because someone pays. But there certainly is free banking. In the 45 years I’ve lived in the US, I’ve never paid for a checking or savings account. Which I think is pretty good because it seems that US banks, like the airlines, are constantly trying to come up with new ways to charge customers for something.

Back around 2013, for example, there was an attempt by some large national banks to charge folks a fee if they used a teller rather than using an ATM or conducting the transaction online. But that effort fizzled in the face of customer push back.

My first checking account was with St. Petersburg Bank, where I went to college. It was a locally owned bank (which no longer exists) which, in a city with a high percentage of retirees, used the “free checking” as a tool for attracting customers. It got my business!

When I moved to Gainesville for graduate school, I initially kept my account with that bank because it allowed me to make deposits with a “postage paid” mailer. (Of course, a first class stamp was only about 10 cents then.) This was long before electronic “direct deposit” existed.

But after I began working in Gainesville, I decided to open up an account there and selected Sun Bank. This was a large Florida-based bank and was a short walk from my downtown office. When I got paid, I’d walk to the bank during lunch to deposit my paycheck. I liked the ability to get money from any Sun Bank ATM throughout the state. This was not the case with the “local” bank in St. Petersburg.

When I moved to Tallahassee in late 1981, there was no Sun Bank. So I kept my Gainesville account and used the postage free mailer procedure again. After maybe two or three years, a bank close to where I lived closed and became the first Sun Bank in town. Yee-ha! I went to the bank and transferred my Gainesville account. Sun Bank then opened three additional branches here. (My local account dates to about 1984 and is one of the oldest accounts they have.)

At some point, Sun Bank merged with a large Atlanta-based bank and is now called SunTrust Bank. The merger significantly extended the bank’s reach beyond Florida. While in Washington, D.C., we were walking in the Georgetown neighborhood and I noticed a SunTrust ATM, so I went over and used it. Very convenient, since using an ATM other than your bank’s often involves a fee from both your bank and the other bank.

Which is…interesting…because the initial premise behind ATM was (a) after hours convenience for the customer and (b) cost savings to the bank by reducing teller workload. Now, ATM’s seem to have become just another “profit” center for the bank.

Since I’ve never paid a fee, I did not know what the value of free checking is. But a few months, ago, a “computer glitch” (translation: they were testing if I’d notice) resulted in my being charged a maintenance fee of $15. That’s $180 a year…real money!

So I went to the bank to straighten it out. Which took more time than I thought it would because my account was so old, and had been through a number of permutations, they a hard time figuring out my status. Every time the bank had changed its “free account” policies, I had managed to qualify under one or more of the various options.

After some research, they established that I had been “upgraded” from a free “senior citizen” account to a free “direct deposit from work” account. When I noted that I was now retired, they said that was irrelevant because I also qualified for a free account under a “minimum checking and saving combined balance” option. As long as I did not want to “upgrade” to some other type of account, then I’d have a free account.

When I asked what account perks were available under a different account, all they could come up with was a free safety deposit box and free checks. But the maintenance fee for that account exceeded the $40 annual safety deposit box fee I pay at my credit union (which I have for financial diversity) and you can buy checks online cheap.

Now, enquiring minds may want to know why I need a safety deposit box. Am I hoarding dozens of $5,000 casino chips as a tax dodge? 😉 (Don’t laugh, it’s been done because a casino chip is the smallest item you can have with large values.)

Perhaps it’s paranoia from being in my 60’s, but I’m concerned about the house burning down and losing important documents. Such as my non-US birth certificate, US passport, original signed will, etc. Replacing these documents would be a major pain in the usual anatomical suspects. So they’re sitting in a safety deposit box….along with some limited edition collectible $5 casino chips. 😉

I assumed that free banking is the norm but apparently it is not. Folks who work for a small business who get paid with a paper check and for whatever reason cannot maintain the minimum balances needed for free checking have to pay. (Although it’s my understanding that credit unions still offer free, or at least cheaper, accounts.)

Which is why I have a savings account at a credit union. If my bank increases the minimum combined balance amount needed for a free account and I do not want to let that amount sit in a near zero interest account, I can move everything to my credit union. I like having options. (Besides, my credit union offers the fine, family-owned, Baton Rouge-based “Community” brand coffee, while my bank’s coffee is not something I care to drink unless I’m desperate.)

And that $15 monthly maintenance fee I’m not paying? That’s about two lunches a month. Free! (Courtesy of my bank.)


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