When you are nearing your retirement age, you may find a number of discounts and offers aimed at people around your age. One of these special deals is something many banks have started to offer – a senior checking account.
What Is a Senior Checking Account?
A senior checking account works like a standard checking account, however, they are usually aimed at those over the age of 55 years. Banks offer a number of benefits to customers who open senior checking accounts like a waiver of account maintenance fees, free overdrafts, free checking, interest on deposits, personalized financial advice, penalty-free withdrawal from a CD (usually capped at one), low or no-fee safe deposit boxes, and perks like discounts on movie tickets. Keep in mind that not all lenders will offer all these benefits to account holders. Banks will usually offer a combination of some of these features.
So, Where’s the Catch?
After having gone through all the perks that a senior checking account can offer, it may seem like a smart move to open one. However, many of these accounts can cost you more than a standard checking account in the long run. Here’s how:
High monthly maintenance fee: While many banks may offer a fee waiver option, keep in mind the lender will usually require you to maintain a minimum balance in the account. If your balance dips below this minimum required limit, you may have to pay a monthly fee that is likely to be more than what’s charged for a regular checking account.
Minimum balance to earn interest: Most lenders will require you to have a certain balance in your account for you to earn interest. Given this, you are better off investing the money in a CD or in the stock market.
Accessibility issues: Unlike standard checking accounts that can be accessed across the country, senior checking accounts may be available only in particular states.
Should You Opt for A Senior Checking Account?
Before you sign up for a senior checking account, ensure that you check what options are available to you. For example, certain states offer free checking accounts to seniors. Similarly, when you compare your options, you may find a standard checking account that offers better features than a senior checking account, in which case, you’ll want to open a regular checking account, and not a senior checking account.
