CONSUMERS : For Seniors, Extra Interest at Financial Institutions
If you’re approaching senior citizen status--which seems to be anywhere from 55 to 65 these days--you might want to see what your bank or savings and loan is offering in discounts to this age group. Chances are, you’ll find a wide range of options, from free checking services to higher-interest-bearing savings accounts and CDs, from credit cards with no annual fees to discount travel programs, auto accident insurance or free photocopying services.
“I call it the consumer battleground of the 1990s,” banking consultant Michael Sullivan of Charlotte, N.C., said of the trend to give older Americans discount programs. “Everybody’s going to be getting in on it, banks, savings and loans, credit unions,” Sullivan said. “At a recent banking seminar I asked people what services they might offer if they were starting a new bank and one guy said ‘a dating service, because there are a lot of lonely people out there.’ I can just see it--the First Mature Bank or the At Long Last Love National Bank.
“The market is definitely toward 50 plus.”
Be careful to read the fine print about these “free” programs. There are no California or federal regulations that require either banks or savings and loans to offer them to a specific age group, or to have uniform account balance requirements to qualify for such an account. Also, financial institutions don’t go out of their way to advertise these programs.
“What we’re seeing is most aggressive marketing that seems to be geared toward the higher income, older American,” said Kent Brunette, a lobbyist for the American Assn. of Retired Persons in Washington. “There’s a tremendous variation from institution to institution. Our concern is that there needs to be a uniform standard regulated by the federal government.”
Brunette, representing AARP, and officials of other consumer-oriented groups testified in favor of passing such uniform standards before the U.S. Senate Committee on Banking, Housing and Urban Affairs this week.
Currently, many banks and savings and loans require you to have your Social Security check directly deposited electronically before you get the discount checking, or to maintain a specific balance in your checking account--generally from $100 to $1,000--or also to have a savings account there.
Others won’t even cash your Social Security check unless you have enough money in your account to cover the check; some charge a set fee or percentage of the face value of the check to cash it.
On the whole, though, if you shop around, there are some discount deals to be had for the over-55 crowd.
And the age limit for these perks has been spiraling downward--from 65 to 62 to 60 to 55. Even the AARP has lowered its membership age to 50.
“It’s a trend across business, across society,” said First Interstate Bank’s John Popovich, who initiated a free checking for seniors program 10 years ago. For customers 62 and over, First Interstate, unlike many financial institutions, does not require seniors to keep a set balance in their checking account in order to qualify. “There is no set amount, no demeaning qualifications,” Popovich said. “It’s much easier to give it across the board to those 62 and over.”
First Interstate, one of California’s four largest banks, along with Security Pacific, Bank of America and Wells Fargo, offers in its senior checking program: no monthly service charge, unlimited check writing, free personalized checks, free domestic travelers checks, reduced rates on most simple interest personal loans such as car loans, and reduced fees for safe deposit boxes, subject to availability at your branch.
Security Pacific and Bank of America also have free checking plans for customers over 62, but they are not as inclusive as First Interstate’s. Wells Fargo does not have a specific program for seniors offering no-fee checking.
“We treat each senior on an individual basis, like other individuals,” a Wells Fargo spokesman said. “We will go to seniors’ homes or retirement residences and do their banking for them, but we have no specific program. We leave that up to the personal banking officer in the branches.”
The push for the mature banking consumer is becoming quite competitive, most industry spokespersons agree, so much so that the age requirement for the special accounts has been lowered by some financial institutions to 55.
Coast Savings and Valley Federal, both savings and loans, have reduced their age limit to 55 for free checking and other programs for seniors.
Santa Barbara Bank and Trust Co. is a forerunner in the bank club market, beginning its Our Gang program 15 years ago for customers over 60. To qualify for Our Gang’s reduced group travel rates, free checking, health seminars and financial planning advice, its senior customers must maintain a $1,000 balance in the checking account or $2,000 in savings or $5,000 in an IRA, Money Market or CD.
Banking consultant Sullivan is co-chairing a conference in New York City on Thursday and Friday to help bankers develop new strategies for appealing to mature customers. In August, he also will publish a banker-geared book on the subject called “Banking on the Mature Market Customer.”
Sullivan, a former banker, pointed out that the baby boom generation is now 40, so in 15 years, the boomers will be mature banking customers and banks will need to appeal to them to get their business.
Right now, he explained, banks are offering these programs to mature customers “out of community relations,” because the over-50 consumers currently have 80% of all savings deposits in the nation’s 14,000 banks and 3,000 savings and loans. “But they will be doing it out of marketing soon. It’s going to be good for the consumer, because banks are going to have to work harder to get their money.”
Banking trends will continue, Sullivan said, toward more of the all-inclusive programs that some financial institutions are already making available--senior clubs through banks that offer a myriad of services, among them discount travel programs, discount medicines and eyeglasses, reduced brokerage costs, accident insurance, etc.
Can bank-sponsored dating services be truly far-fetched?
CONSUMER VIEWS
Credit card come-ons. Page 3.
NEW AND USEFUL
A sporting love match. Page 3.
