On Mon, 5 Dec 2005 14:20:16 -0500, "Janie"
wrote:


"Tim May" wrote in message
t...
In article ,
SpammersDie wrote:


The poorer person can't get a break. If a less affluent person puts a
thousand dollars in the bank and agrees to leave it there as long as a
wealthy person agrees to leave their $100,000 then why doesn't the
less
affluent person deserve to receive the same interest rate on their
money?
It
doesn't work that way.

It shouldn't either. There's a fixed overhead cost to servicing every
deposit account what with the monthly account statements, 1099's and
record-keeping and that cost doesn't change whether the account holds a
$100,000 or a penny. It costs less to service one $100,000 account than
it
is to service a hundred $1,000 accounts so those who want $1,000
accounts
can expect to give up something to make it worth the bank's while.

This is basic economies of scale and is nothing unusual.

Furthermore, the small accounts are where the most "service" is
required, in many cases. Namely, the counter service with customers
complaining about overdrawing their accounts, late fees, bounced check
charges, asking for lower rates, etc.

This is why many of us use private banking services, to avoid the
riff-raff.


--Tim May

When did banks start charging late fees on saving accounts? Bounced checks
on saving accounts and CD's ?(A few savings accounts do allow limited
checking but not most.) Asking for lower rates, on what, not on a savings
account. I was talking about savings, not checking. My point was that
since smaller accounts receive lower interest rates poorer people are
somewhat discouraged from saving since they don't get the higher rate
received by those who can afford to make larger deposits. I can understand
the bank's side of things when it comes to the cost of servicing an account,
but wouldn't simply be better to impose an account service fee rather than
discouraging smaller deposits? Seems to me that banks should encourage
customers to save.

I avoid the bank and invest elsewhere to get a better yield on my
investment. Since the banks discourage smaller accounts, people without
much to save or invest should look elsewhere.

I do have to agree though that many people are a major problem for the
banking system because they so often overdraw checking accounts. Here in PA
the problem has increased because even the totally stupid are required to
have someplace to automatically deposit welfare, SSI payments, etc. These
people don't have a clue about how to keep a checkbook balanced or how to
reconcile a bank statement, or even correctly write a check. They are at
the bank or on the phone frequently asking for assistance with their
accounts. The bank should impose a fee for providing this service for the
stupid. I've never had an error in a bank account in more than 40 years and
have never bounced a check. My bank provides me with free checking , free
checks, free ATM service if I use their system, and other related services.

Smaller depositors should shop around before investing their money at a bank
because as you have correctly pointed out, the bank favors those with more
funds to deposit. JMO, but a Credit Union is often a good choice for those
who don't much money but want to get started on a savings plan.



None profit credit unions are becoming quite popular for many of these
reasons.

Gunner

"Pax Americana is a philosophy. Hardly an empire.
Making sure other people play nice and dont kill each other (and us)
off in job lots is hardly empire building, particularly when you give
them self determination under "play nice" rules.

Think of it as having your older brother knock the **** out of you
for torturing the cat." Gunner