Survey Says Small Savings Account Can Be a Bargain

Banks are charging Americans more fees and paying them less interest. But an old-fashioned statement savings account remains a bargain for many small savers, particularly those with less than $1,000 to deposit, a consumer survey concluded Wednesday.

The study, the fourth annual survey by the Consumer Federation of America and San Francisco Consumer Action, said that for the small saver, a statement savings account yields the most money at the lowest cost.

“Most institutions do not penalize low-balance statement savings account holders with interest rate reductions or excessive fees,” the study said. While there are monthly or quarterly fees, they often are not charged unless an account drops below $100.

Higher Yield

Thus, a small saver with just under $1,000 in assets--about 40% of Americans--could have earned an average of $45.68 in interest from a statement savings account from April, 1986, to April, 1987.

The same amount in a money- market deposit account, with hefty monthly fees, would have netted an average of only $5.35 over the year, the report said.

The study was based on data gathered by some 20 consumer groups in 16 states covering 99 banks and 91 savings and loan associations.

It was not a scientific sample of the nation’s 14,400 banks and 3,900 savings institutions, the groups conceded, but they said it did appear to be fairly representative of the industry.

Fees charged on an interest-bearing checking account, also known as a NOW account, climbed 11.8% in the year ending in April, from $79.72 to $89.10 for the 110 institutions surveyed in both years, the report said.

Best Deals at S&Ls;

Fees also rose an average of 7.6% on non-interest bearing checking accounts. Surprisingly, the fees were higher on the non-earning account, hitting an average $103.01 for the 74 institutions surveyed in both years.

The best bargains were at S&Ls;, which consistently charged lower fees than banks. While banks charged an average $101.34 on NOW accounts and $103.84 on regular checking, the average charges by thrift institutions were $72.99 on NOW accounts and $79.02 for regular checking accounts.

Money-market deposit accounts paid an average of 4.75% interest, compared to an average of 5.17% for statement savings accounts.