Comparing Costs of Financial Services: What is Non-Banking Costing You?
A December 2009 survey sponsored by the Federal Deposit Insurance Corp. found that approximately 7.7 percent of U.S. households are unbanked. That's 17 million people. It also found that an additional 17.9 percent of U.S. households, representing 43 million Americans, were underbanked. Together, some 60 million Americans either don't utilize traditional banking services or use alternative financial services to meet their needs.
Many of the unbanked and underbanked are people in low-income and minority households. These households rely on alternative financial services, citing convenience or the ease of qualifying for a loan compared with a traditional bank. A significant portion rely heavily on simply using cash.
|Type||Description||Monthly Cost||Cost Per Year|
Checking Account: eBanking with Bank of America
|Checking account at an FDIC insured depository institution. Non-interest bearing.||
$8.95 per month. Fees waived only when electing to bank only, use paperless statements and make deposits and withdrawals only at ATM - no teller.
$25 deposit to open.
|$0 - $107.40|
|Check Cashing: Pay-O-Matic||Check cashing service that charges on a per-cashed check basis.||1.91 percent of amount of check cashed.||Varies. Assume $1,000 paycheck bi-weekly = $496.60|
|Wal-Mart||Check cashing service that charges on a per-cashed check basis.||Flat fee of $3, up to and including $1,000; $6 for checks above that up to $5,000.||Varies. Assume $1,000 paycheck bi-weekly = $78. (For $1,001 or above = $156.)|
|"Under the mattress"||Stashing money in the house or somewhere else considered secure and accessible.||Free. Not insured, and subject to loss from theft, fire, flood, etc.||Personal peace of mind; hassles from creditors, etc.|
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