6 ms·

Walmart Prepares to Offer Low-Cost Checking Accounts

39 points by spking 12y ago

ihsw 12y ago
Seems they're taking a page from Loblaws and PCFinancial. http://pcfinancial.ca http://pcfinancial.ca I havent worked at Loblaws for a long time, but I still use them.
- Pxtl 12y ago
  I have to say, while I like the prices on their products, all the PC family of non-food services drive me batty with the most amazingly awful customer service I've ever seen in that sort of service. Individually the CSRs are generally friendly, but collectively their processes are awful. The phones, the credit cards, etc. I still use their services, of course, because I'm a chump and only encouraging them to continue treating me like crap.
amalag 12y ago
Most credit unions still give free checking accounts. http://www.bankrate.com/finance/checking/want-free-checking-check-out-credit-unions-1.aspx http://www.bankrate.com/finance/checking/want-free-checking-... Meanwhile I got something in the mail enticing me with $300 to open a checking account at Capital One.
- latortuga 12y ago
  Capital One 360 (formerly ING Direct) also offers free checking and savings. I have not used my associated checking account in approximately 8 years of being a customer and I've never been charged a fee.
downandout 12y ago
This article is making a much bigger deal out of this than it is. Walmart has entered into a marketing agreement with GoBank prepaid cards. You can already get one at gobank.com, sans Walmart. It offers some, but certainly not all, of the benefits of a checking account. For starters, they don't give their customers checks (so it's not a checking account). These accounts cannot send or receive wire transfers (though they can receive direct deposit or any other ACH-based credit, such as those from PayPal). It also supports ACH debit, and it has a form of of a bill pay service that uses PayPal to pay any phone number or email address. You can also have the service print and send a physical check directly to anyone, but I believe it takes more than a week. Calling it a checking account is a misnomer at best.
deleted 12y ago
[deleted]
pzxc 12y ago
I'm in the US, and I did a lot of research on banks and checking accounts about a year ago when I was trying to find the best setup (for me). I hardly ever go into a bank branch, so I was willing to sacrifice having that possibility if it meant lower fees and less service. I found four good possibilities, and I would recommend any of these to others if you can get them (drawbacks/caveats in parenthesis): 1. Charles Schwab (lowest limit on mobile check deposits, was $2000/day max when I checked) 2. USAA (available to family members of military only when I checked) 3. ING Direct (later bought by Capital One and renamed to Capital One 360 - this is what I now use) 4. Simple (formerly banksimple, now just simple.com) I was on the waiting list for Simple, but before they gave me the invite I ended up getting set up with ING Direct, and even though they are now Capital One 360, nothing about the program has changed and it meets all my needs - it's great! The best parts, besides the no monthly fees etc which was a prerequisite for me, is they give you a small credit line attached to your primary account ($500 to start though you can ask for an increase if you want), and if you do happen to overdraft they just charge you interest based on the overdraft amount, which ends up being a few pennies at the end of the month - no overdraft fees at all. If you don't have the credit line or you go over, the transactions are just declined. I still have a Charles Schwab account, because in addition to no monthly fees, they refund ALL atm fees from anywhere, even the ones that the atm owners charge. You can literally use a $10-fee atm at like disneyland or on a cruise ship, and they will refund the fee. I keep a small amount of cash in here for when I want to get cash from an ATM and don't want to look for one that is feeless for my regular bank (Capital One 360 which uses AllPoint atms so they are plentiful, but hey my laziness knows no bounds) I was never able to try USAA despite hearing great things because no one I know was in the military. I was planning to switch to Simple once I was able, but ended up staying with Capital One 360 since it's great. Oh yeah, another awesome feature you don't get anywhere else, that started with ING direct but capital one has kept it, is you can open an unlimited amount of savings accounts. It's really one savings account in the background, but they treat the amounts separately as if they are separate accounts, so from the front end it seems that they are. This is awesome for setting up savings goal, automatic savings deductions for various purposes (like quarterly tax estimates if you are self-employed), etc. The stupid employer I'm at wouldn't let me sign up for direct deposit until I had been working here for 6 months (I know, what kind of policy is that, right??) -- and even though it's the highest mobile check deposit limit I could find, Capital One 360 still has a $3000-per-check limit on mobile deposit. My employer not only wouldn't let me get direct deposit right away, but pays monthly, so since my paycheck was bigger than the limit I was forced to go back to a "regular" bank for a few months. So I got a Bank of America account. They charged me $12 a month for the privilege of using their services without having direct deposit set up (if I could set it up I wouldn't need them!). Closed that account as soon as I was able to get direct deposit, which I set up for my CO-360 account. Branch manager of BoA was disappointed (ha). I did move to a new apartment in the middle of that, and needed a cashier's check or money order for the deposit. Years past had always just gotten a cashier's check from my bank, they usually let you do like one a month for free if you had an account -- nope they don't do that anymore. $10 fee. (Screw that, went to Walmart and got a money order for 49 cents). Also asked about notarization -- don't need it right now but since I was asking about cashier's checks anyway thought I'd ask if I could still get something notarized if I had an account -- nope sorry, they do have a notary but they are only allowed to notarize official Bank of America documents. Wtf?? Anyway, my BofA account is closed as of a few weeks ago, and I couldn't be happier to not be their customer anymore. Fully set up with direct deposit to Capital One 360 now, and that's where I intend to stay for the next decade. (Unless they start screwing up their deal in which case I'm sure simple would still love to have me -- only thing I don't like about them is I prefer having a mastercard debit card rather than visa) Hope any of this info is useful to somebody.
spindritf 12y ago
You can almost taste the irony of the hated, exploitative megacorp Walmart doing more to help poor people and put a check on cheque cashing places than any politician ever.
- nofinator 12y ago
  The real problem with check-cashing places are payday loans. Low-cost checking accounts from Walmart won't stop those.
  - bilbo0s 12y ago
    I don't know. It seems to me that a good entrepreneur would see the proverbial "writing on the wall" here. If I were a proprietor of a check cashing establishment... I would think that now might be a good time to cash out... before the writing gets any more clear. Alternatively, it might be good to seek out a service that you can offer that would be a complement to what you expect the Walmart service to evolve into. I don't know what that complement would look like... but I do sense that it is likely pretty profitable. In any case, the WORST thing they could do is sit still and assume business as usual. I mean, there is clearly a train coming... it's time to get out of the way.
- lukeschlather 12y ago
  This service is largely thanks to politicians banning opt-out overdraft fees on debit and ACH credit cards in 2010. But thanks to that change, you can get basically the same service from a credit union for a one-time $5 membership fee. If you're over the $500/month deposit bar, you should definitely be using a credit union. The whole idea of not offering checks except as the bank can issue them is a really good one though. I hope to see credit unions emulating that bit. (Just, not the $9/month fee, which is better than overdraft fees since it's predictable, but it's still exploitative since we're talking about people who are fundamentally bad at predicting their finances.)
- sliverstorm 12y ago
  Remember that Walmart is hated because it appears to be helping on the surface, but is in fact exploitative below the surface. So... remember that when you evaluate this new offering. I'm going to lean suspicious for now.
navait 12y ago
The fee seems a bit egregious, even for commercial banking. My bank never charged me for a checking account, and even reimburses ATM fees.
- jdc0589 12y ago
  ditto. Always been free for me. I didn't know that wasn't the norm.
  - Someone1234 12y ago
    It is the norm, unless you're poor... It would be interesting as a study to go through and calculate how much more a poor person pays per year for the same level of service just because they're poor (e.g. higher car payments, no 0% APR offers, account fees, etc).
    - runako 12y ago
      Upshot at the NYT did an article on checking fees through this lens recently: http://www.nytimes.com/2014/09/21/your-money/in-checking-accounts-the-less-you-have-the-more-you-may-pay.html?module=Search&mabReward=relbias%3Aw%2C%7B%221%22%3A%22RI%3A9%22%7D http://www.nytimes.com/2014/09/21/your-money/in-checking-acc... Not sure if it's paywalled, so the gist is that for relatively affluent folks, the annual cost of a checking account is ~$18. For the "cash-strapped" it's closer to $500. Obviously that's just checking accounts, but I wouldn't be surprised to learn that many other things are more expensive for the poor as well.
      - eitally 12y ago
        That $18 is probably just the cost of checks, too. I have never paid for a checking account, but one of the reasons why is that the "free" stuff requires a minimum balance (Wachovia --> Wells Fargo) at a lot of banks. I have had an eTrade bank account since around 1997 when I signed up with Telebank, and have been very happy with them, too. They refund all ATM fees, and it's easy to keep it adequately funded via scheduled transfers from my primary bank (which conveniently also holds my mortgage), and since my employer uses eTrade to service its ESPP and Options programs, it's convenient to make trades there, too.
Someone1234 12y ago
In the UK "checking accounts" (called Current Accounts) are free. With so called "Basic Current Accounts" (accounts with no overdraft/borrowing facility) being available even to people with horrible/no credit at all. The way UK banks make money on current accounts is via interest (the difference between the Bank of England rate and their rate, the spread). They can also charge non-basic current account customers for things like unagreed overdrafts and so on. I don't really understand why current accounts in the US cost $12-8/month. It isn't like "checking accounts" in the US have much better interest rates. So they're likely double-dipping (getting $ off of the spread AND fees). Plus a lot of US banks require you to have a savings account with $x in it on top of your "checking account" just to waive the fee. Which means they're still double dipping there too, the spread on both the savings in the savings account (their "savings" accounts have horrible interest rates) and any money in the "checking account." This is also making it easy for fraudsters to move money. Since there are no "basic bank accounts" for the poor, throw-away/burner debit cards have become common which fraudsters can move stolen money onto and then spend it freely (as those cards have no ID check, etc). Don't even get me started on how big of a scam the throw-away/burner debit cards are. Before you get someone one you should check out the fine print in terms of fees that mysteriously eat up any remaining balance. Aside from the risk of bankrupsy and loss of interest, normal gift cards are less of a scam.
- jstalin 12y ago
  That's why many of us dumped banks for credit unions. Most credit unions offer free checking accounts and much better interest rates and customer service. The major banks were rocked by the 2007 meltdown and are still trying to recover.
- dragonwriter 12y ago
  > I don't really understand why current accounts in the US cost $12-8/month. Mostly, as a way of dissuading customers whose support costs exceed provided revenue; its not so much to make money on the fees as to make people who can't afford to do what the bank wants (do their main deposits by direct deposit, maintain a certain minimum balance, maintain a savings account with a certain minimum balance, etc.) choose, from the expense, not to have an account at all. The US has for at least several decades had substantially greater wealth inequality than the UK (both before and after considering the effect of taxes and government assistance), and that has affected the way business approach the desirability of customers.
spking 12y ago
Some may not realize this, but YC startup Loopt is a big part of this. After being acquired by Green Dot they built the GoBank product, which is what Walmart will really be offering here.
ck2 12y ago
Go to a credit union. Free.

39 points by spking 12y ago

ihsw 12y ago

Seems they're taking a page from Loblaws and PCFinancial. http://pcfinancial.ca http://pcfinancial.ca I havent worked at Loblaws for a long time, but I still use them.

Pxtl 12y ago
I have to say, while I like the prices on their products, all the PC family of non-food services drive me batty with the most amazingly awful customer service I've ever seen in that sort of service. Individually the CSRs are generally friendly, but collectively their processes are awful. The phones, the credit cards, etc. I still use their services, of course, because I'm a chump and only encouraging them to continue treating me like crap.

amalag 12y ago

Most credit unions still give free checking accounts. http://www.bankrate.com/finance/checking/want-free-checking-check-out-credit-unions-1.aspx http://www.bankrate.com/finance/checking/want-free-checking-... Meanwhile I got something in the mail enticing me with $300 to open a checking account at Capital One.

latortuga 12y ago
Capital One 360 (formerly ING Direct) also offers free checking and savings. I have not used my associated checking account in approximately 8 years of being a customer and I've never been charged a fee.

downandout 12y ago

This article is making a much bigger deal out of this than it is. Walmart has entered into a marketing agreement with GoBank prepaid cards. You can already get one at gobank.com, sans Walmart. It offers some, but certainly not all, of the benefits of a checking account. For starters, they don't give their customers checks (so it's not a checking account). These accounts cannot send or receive wire transfers (though they can receive direct deposit or any other ACH-based credit, such as those from PayPal). It also supports ACH debit, and it has a form of of a bill pay service that uses PayPal to pay any phone number or email address. You can also have the service print and send a physical check directly to anyone, but I believe it takes more than a week. Calling it a checking account is a misnomer at best.

deleted 12y ago

[deleted]

pzxc 12y ago

I'm in the US, and I did a lot of research on banks and checking accounts about a year ago when I was trying to find the best setup (for me). I hardly ever go into a bank branch, so I was willing to sacrifice having that possibility if it meant lower fees and less service. I found four good possibilities, and I would recommend any of these to others if you can get them (drawbacks/caveats in parenthesis): 1. Charles Schwab (lowest limit on mobile check deposits, was $2000/day max when I checked) 2. USAA (available to family members of military only when I checked) 3. ING Direct (later bought by Capital One and renamed to Capital One 360 - this is what I now use) 4. Simple (formerly banksimple, now just simple.com) I was on the waiting list for Simple, but before they gave me the invite I ended up getting set up with ING Direct, and even though they are now Capital One 360, nothing about the program has changed and it meets all my needs - it's great! The best parts, besides the no monthly fees etc which was a prerequisite for me, is they give you a small credit line attached to your primary account ($500 to start though you can ask for an increase if you want), and if you do happen to overdraft they just charge you interest based on the overdraft amount, which ends up being a few pennies at the end of the month - no overdraft fees at all. If you don't have the credit line or you go over, the transactions are just declined. I still have a Charles Schwab account, because in addition to no monthly fees, they refund ALL atm fees from anywhere, even the ones that the atm owners charge. You can literally use a $10-fee atm at like disneyland or on a cruise ship, and they will refund the fee. I keep a small amount of cash in here for when I want to get cash from an ATM and don't want to look for one that is feeless for my regular bank (Capital One 360 which uses AllPoint atms so they are plentiful, but hey my laziness knows no bounds) I was never able to try USAA despite hearing great things because no one I know was in the military. I was planning to switch to Simple once I was able, but ended up staying with Capital One 360 since it's great. Oh yeah, another awesome feature you don't get anywhere else, that started with ING direct but capital one has kept it, is you can open an unlimited amount of savings accounts. It's really one savings account in the background, but they treat the amounts separately as if they are separate accounts, so from the front end it seems that they are. This is awesome for setting up savings goal, automatic savings deductions for various purposes (like quarterly tax estimates if you are self-employed), etc. The stupid employer I'm at wouldn't let me sign up for direct deposit until I had been working here for 6 months (I know, what kind of policy is that, right??) -- and even though it's the highest mobile check deposit limit I could find, Capital One 360 still has a $3000-per-check limit on mobile deposit. My employer not only wouldn't let me get direct deposit right away, but pays monthly, so since my paycheck was bigger than the limit I was forced to go back to a "regular" bank for a few months. So I got a Bank of America account. They charged me $12 a month for the privilege of using their services without having direct deposit set up (if I could set it up I wouldn't need them!). Closed that account as soon as I was able to get direct deposit, which I set up for my CO-360 account. Branch manager of BoA was disappointed (ha). I did move to a new apartment in the middle of that, and needed a cashier's check or money order for the deposit. Years past had always just gotten a cashier's check from my bank, they usually let you do like one a month for free if you had an account -- nope they don't do that anymore. $10 fee. (Screw that, went to Walmart and got a money order for 49 cents). Also asked about notarization -- don't need it right now but since I was asking about cashier's checks anyway thought I'd ask if I could still get something notarized if I had an account -- nope sorry, they do have a notary but they are only allowed to notarize official Bank of America documents. Wtf?? Anyway, my BofA account is closed as of a few weeks ago, and I couldn't be happier to not be their customer anymore. Fully set up with direct deposit to Capital One 360 now, and that's where I intend to stay for the next decade. (Unless they start screwing up their deal in which case I'm sure simple would still love to have me -- only thing I don't like about them is I prefer having a mastercard debit card rather than visa) Hope any of this info is useful to somebody.

spindritf 12y ago

You can almost taste the irony of the hated, exploitative megacorp Walmart doing more to help poor people and put a check on cheque cashing places than any politician ever.

nofinator 12y ago
The real problem with check-cashing places are payday loans. Low-cost checking accounts from Walmart won't stop those.
- bilbo0s 12y ago
  I don't know. It seems to me that a good entrepreneur would see the proverbial "writing on the wall" here. If I were a proprietor of a check cashing establishment... I would think that now might be a good time to cash out... before the writing gets any more clear. Alternatively, it might be good to seek out a service that you can offer that would be a complement to what you expect the Walmart service to evolve into. I don't know what that complement would look like... but I do sense that it is likely pretty profitable. In any case, the WORST thing they could do is sit still and assume business as usual. I mean, there is clearly a train coming... it's time to get out of the way.
lukeschlather 12y ago
This service is largely thanks to politicians banning opt-out overdraft fees on debit and ACH credit cards in 2010. But thanks to that change, you can get basically the same service from a credit union for a one-time $5 membership fee. If you're over the $500/month deposit bar, you should definitely be using a credit union. The whole idea of not offering checks except as the bank can issue them is a really good one though. I hope to see credit unions emulating that bit. (Just, not the $9/month fee, which is better than overdraft fees since it's predictable, but it's still exploitative since we're talking about people who are fundamentally bad at predicting their finances.)
sliverstorm 12y ago
Remember that Walmart is hated because it appears to be helping on the surface, but is in fact exploitative below the surface. So... remember that when you evaluate this new offering. I'm going to lean suspicious for now.

navait 12y ago

The fee seems a bit egregious, even for commercial banking. My bank never charged me for a checking account, and even reimburses ATM fees.

jdc0589 12y ago
ditto. Always been free for me. I didn't know that wasn't the norm.
- Someone1234 12y ago
  It is the norm, unless you're poor... It would be interesting as a study to go through and calculate how much more a poor person pays per year for the same level of service just because they're poor (e.g. higher car payments, no 0% APR offers, account fees, etc).
  - runako 12y ago
    Upshot at the NYT did an article on checking fees through this lens recently: http://www.nytimes.com/2014/09/21/your-money/in-checking-accounts-the-less-you-have-the-more-you-may-pay.html?module=Search&mabReward=relbias%3Aw%2C%7B%221%22%3A%22RI%3A9%22%7D http://www.nytimes.com/2014/09/21/your-money/in-checking-acc... Not sure if it's paywalled, so the gist is that for relatively affluent folks, the annual cost of a checking account is ~$18. For the "cash-strapped" it's closer to $500. Obviously that's just checking accounts, but I wouldn't be surprised to learn that many other things are more expensive for the poor as well.
    - eitally 12y ago
      That $18 is probably just the cost of checks, too. I have never paid for a checking account, but one of the reasons why is that the "free" stuff requires a minimum balance (Wachovia --> Wells Fargo) at a lot of banks. I have had an eTrade bank account since around 1997 when I signed up with Telebank, and have been very happy with them, too. They refund all ATM fees, and it's easy to keep it adequately funded via scheduled transfers from my primary bank (which conveniently also holds my mortgage), and since my employer uses eTrade to service its ESPP and Options programs, it's convenient to make trades there, too.

Someone1234 12y ago

In the UK "checking accounts" (called Current Accounts) are free. With so called "Basic Current Accounts" (accounts with no overdraft/borrowing facility) being available even to people with horrible/no credit at all. The way UK banks make money on current accounts is via interest (the difference between the Bank of England rate and their rate, the spread). They can also charge non-basic current account customers for things like unagreed overdrafts and so on. I don't really understand why current accounts in the US cost $12-8/month. It isn't like "checking accounts" in the US have much better interest rates. So they're likely double-dipping (getting $ off of the spread AND fees). Plus a lot of US banks require you to have a savings account with $x in it on top of your "checking account" just to waive the fee. Which means they're still double dipping there too, the spread on both the savings in the savings account (their "savings" accounts have horrible interest rates) and any money in the "checking account." This is also making it easy for fraudsters to move money. Since there are no "basic bank accounts" for the poor, throw-away/burner debit cards have become common which fraudsters can move stolen money onto and then spend it freely (as those cards have no ID check, etc). Don't even get me started on how big of a scam the throw-away/burner debit cards are. Before you get someone one you should check out the fine print in terms of fees that mysteriously eat up any remaining balance. Aside from the risk of bankrupsy and loss of interest, normal gift cards are less of a scam.

jstalin 12y ago
That's why many of us dumped banks for credit unions. Most credit unions offer free checking accounts and much better interest rates and customer service. The major banks were rocked by the 2007 meltdown and are still trying to recover.
dragonwriter 12y ago
> I don't really understand why current accounts in the US cost $12-8/month. Mostly, as a way of dissuading customers whose support costs exceed provided revenue; its not so much to make money on the fees as to make people who can't afford to do what the bank wants (do their main deposits by direct deposit, maintain a certain minimum balance, maintain a savings account with a certain minimum balance, etc.) choose, from the expense, not to have an account at all. The US has for at least several decades had substantially greater wealth inequality than the UK (both before and after considering the effect of taxes and government assistance), and that has affected the way business approach the desirability of customers.

spking 12y ago

Some may not realize this, but YC startup Loopt is a big part of this. After being acquired by Green Dot they built the GoBank product, which is what Walmart will really be offering here.

ck2 12y ago

Go to a credit union. Free.