Security Deposits As An Alternative to Minimum Daily Balance.
By
Staten Island, NY Posted: 5/28/2015 1:00:00 AM
Here's how banks can offer an alternative to minimum balance maintenance fees.
One of the worst things about "Free Checking", is that banks find all sorts of ways of charging fees. For example, many banks charge a monthly fee whenever your balance drops below a pre-set amount, even if it only drops to that point one day in the month.
This has always bugged me, because that basically means that there's a portion of your money that you can never quite have access to. So even when you have $1100 in the account, you really only have $1000 you can touch. The bank wins whether they charge the fee or not, because if a million people never touch that remaining $100, they have $100 million more liquid funds to lend out on any given day.
The trouble is, as long as the account has a positive balance, people can accidentally drop below the minimum balance, so instead of playing around with "Minimum Balances", why not just give a "Security Deposit" for that amount when you sign up. Think of it as a Security Deposit. Unlike a regular deposit, this amount doesn't show up in your balance, effectively guaranteeing that unless you get a negative balance, your account will never be lower than the minimum.
Like all Security Deposits, you get your money back when you close your account.
Joe Crescenzi, Founder
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