Banking study encourages use of common cents
Local banks may be charging students a pretty penny for standard
banking transactions, claims CALPIRG
By Jeff Shore
It’s Friday. With paycheck in hand, you trudge into Westwood,
ready for a night of debauchery. But wait  the most important
part of your week’s work still lies ahead: choosing the right
bank.
So says a new study from the California Student Public Interest
Research Group (CALPIRG), the organization best known for its
environmental efforts on behalf of students.
Conducted at the end of September, this comprehensive survey of
local banks and their charges, minimums and rules on checking
accounts offers clarification for the bewildered student.
A minefield of confusion and unwanted service charges awaits
unsuspecting students, and unfortunately, banks aren’t making
things any easier, according to the survey. Available in full to
students who request it, the study shows how widely charges and
banking minimums can vary.
The two main types of checking accounts  those giving
interest, and those not  differ mainly in the minimum balance
they require. For many students, the average $1,500 minimum on
interest bearing checking accounts is nearly impossible to
maintain.
However, non-interest bearing accounts, while requiring a lower
daily balance, subject account holders to per check charges and
monthly fees if the holder should drop below a given balance.
These fees can be very large. Simply dropping below the minimum
balance of $750 one time in a month subjects the account holder to
a $9 fee at Wells Fargo Bank.
This means that 12 months of easy-to-make accounting errors
could set you back $108 a year. On the other hand, Fidelity
Federal, whose closest branch is in West Los Angeles, has no
minimum balance whatsoever.
Such now-common fees as per-check charges are a relatively
recent innovation. Only with the advent of electronic processing of
checks  before, they were processed manually  can banks
actually apply the per-check charges many students are slapped
with, said bank representatives.
Automatic Teller Machine (ATM) convenience, another issue of
concern to cash-hungry students, can be a pricey privilege. Wells
Fargo and Bank of America charge between $1 and $3 each time you
step up to a "foreign," or different bank’s, ATM. Of course, their
native ATM’s are also among the most common available.
Further, at Bank of America ATMs, simply looking at your last 10
transactions costs $1, a service provided free just by walking in
to the bank during working hours.
When searching for the perfect marriage between you and bank,
beware of misnomers as well, many consumer advocates advise.
At Great Western, "Student Checking," is not a special service
provided to students to serve their needs better, but an excuse to
slap lower-income people with a monthly service charge for
checking.
Other institutions view things differently.
While Rosa Shadsirat, Financial Services representative at Bank
of America insists, "We always have specials for students," many
banks are now offering deals to students on campus.
Choosing a bank, however, is not as simple as just finding the
best interest rates and lowest fees. While banks are generally
perceived as solid, immutable institutions, since the ’80s,
problems are not uncommon.
In the weeks since CALPIRG conducted its study, Fidelity Federal
sold several of its branches to Home Savings because of a falling
profit margin.
With a little more money, a lot more choices are available to
students. By combining their savings and checking accounts at some
banks, it’s possible to eliminate minimum balances altogether.
For example, Bank of America offers an account it calls Alpha,
which also throws in free checks and overdraft protection as
well.
And, for students looking for a longer term investment, the Los
Angeles Times prints a survey of local Certificate of Deposit (CD)
rates every Monday in its Business section.