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Be wary of senior-specific checking accounts

August 27, 2012

Many banks offer checking accounts created specifically with seniors in mind, but researchers have found they may not offer any advantages over the traditional model. A study of four large banks and one credit union in the United States highlighted some of the drawbacks of senior checking accounts.

The research was conducted by the Pew Charitable Trusts and found that one of the touted advantages of senior-specific accounts, waived fees, may not be as appealing as it might seem. For instance, some of the banks waive the costs on cashier's checks, which are not used by many people and won't do much to cut back on the retirement cost of living. Instead, seniors should look for accounts that have lower monthly fees or reduced minimum balances, The New York Times notes.

"Given the checking account options provided to seniors, more transparent fee disclosures are particularly relevant," study authors wrote. "Financial institutions should lay out in a simple, clear format the fees, terms, and conditions of each type of account so that seniors can easily choose the account that is most appropriate."

In fact, some accounts may actually be a worse deal for seniors. Specifically, researchers found one bank that waived monthly fees for anybody who has a $5,000 monthly balance. Though it may seem like a fair deal, when one considers the standard account waives the fee for $1,500, it raises some questions.

The report comes amid new concerns about financial scams targeted at seniors. A recent survey of more than 2,600 financial experts revealed that seniors who fall victim to scams lose an average of $140,500 as a result, according to CNNMoney.