Do you lose money if you keep a very small amount in a savings account?

Question

I read an article a few days ago that said that it's not worthwhile to keep a bank savings account, especially if you put very little money into it. The article was short and not totally clear, but it seemed like they were saying

you'd have to keep a certain amount of money into the account just to break even, because of all the bank fees. I got talked into one of those "keep the change" savings accounts recently. I hadn't read the article yet, but I felt like he was just up-selling. I actually said no 3 times, before I said yes. Was he just being unusually helpful, or is this a racket? More importantly, will I loose more money than I put in by keeping this account open?

Answer 1

A SAVINGS account should NEVER have fees.  Many don't pay enough interest to cover inflation unless your balance is relatively large.  The keep the change accounts a largely a marketing gimmick.  You can save as much or more by simply transferring money on your own.

Answer 2

I have a credit card through a credit union that I've had for about 15 years. When I opened the account, they said that I had to put at least $50 in a savings account to be able to keep the card active. It gets some token amount of interest every month. And, last time I checked the statement, the balance was up to about $950. And, I never put in a dime except for that initial $50 deposit.

Answer 3

You will only lose money if you are paying fees on the account.  You should call your bank to inquire about any fees on the new account you got.  I would guess there are no fees involved with that but you have to ask your bank to be sure.

I have Wachovia's program where they move $1 for each electronic transaction (debit card purchase, electronic bill payment, etc.) and I love it because I don't really notice the money leaving my account but my savings is building up without me even doing anything.  This program does not have any fees that I am aware of but that is only Wachovia.  I cannot comment on any other bank's fees.

Good luck.