Credit: Shutterstock photoWhen you're nearing retirement age, you'll see plenty of discounts and perks aimed at seniors. Among them: senior checking accounts. Should you get one?
The quick answer: not necessarily.
What are the perks of senior checking?
A senior checking account is essentially a regular checking account that offers features designed to appeal to customers age 55 and older. Requirements and perks vary by bank, but fee waivers and free checks tend to be the top selling points.
Here's a comparison of checking accounts at three major banks:
Banks and credit unions may offer different combinations of these features or have other perks. Even so, some institutions have free checking accounts that offer similar perks to any customer, regardless of age. It pays to shop around. See some of our picks:
Compare top free checking accounts
What are the downsides?
Some of these accounts can save you money, but others can end up costing you more than a regular checking account would. Common downsides include:
- Higher monthly maintenance fees. One bank might offer a senior account with a $10 maintenance fee, while its standard checking account charges only $5. You might be able to avoid that fee if you have a minimum or average balance of $1,000, but you might end up paying double if your balance regularly dips below the threshold.
- A minimum balance to qualify for interest rates. Some banks offer dividends for balances as low as $500; others will wait until you have at least $1,500. Depending on how much you plan to keep, you might be better off keeping your money in a savings account with a high interest rate or a certificate of deposit. (Check out top savings accounts with competitive interest rates and low or no minimum balance.)
- You may not benefit much from waivers on fees that are seldom incurred to begin with, such as sending a cashier's check or requesting reports beyond your monthly statement.
If you've worked a long time and have saved and built a cushion, a higher minimum balance may be no problem. For those who have retired, a checking account might run lower than it did when they were earning a paycheck. If you can't maintain the required balance on a senior account, you could lose more than $100 a year in fees.
Deciding whether to get an account
So how should you determine whether a senior checking account is worth moving your money into?
- Research and compare nearby credit unions and banks, and assess whether their perks will ultimately save you money. Keep your eyes peeled for minimum balance requirements and monthly fees.
- Consider whether the benefits will ultimately save you money. If they don't really apply to you, skip it.
- Compare regular checking accounts with senior checking accounts. (Here are our picks for the best checking accounts for this year .) You may find that a regular checking account is still the better deal. Many banks offer free checking accounts with no monthly service fees, along with perks such as free checks, higher interest rates or ATM fee reimbursements.
Amber Murakami-Fester is a staff writer at NerdWallet, a personal finance website. Email: amufe@nerdwallet.com .
Updated Jan. 19, 2018
The article Checking Accounts for Seniors originally appeared on NerdWallet.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
