Sally’s life just changed quite radically. She had moved to a new town and got a new job at a wonderful vet clinic. She walked into Hometown Bank, where she wanted to open a checking account to deposit her future paychecks. The smiling bank teller proudly informed her that she was in luck: Hometown Bank now offers free checking. “What do you mean, free checking? Everything is free? Where’s the catch?” asks Sally. She’s no dummy; she works in the veterinary profession after all. She knows there’s no such thing as a free lunch. She also had just read in a journal quoting Bankrate.com that only 45 percent of banks offer fee-free, noninterest-bearing checking accounts. That’s down from about 75 percent in 2005! The teller answered with a big smile: “Free checking means free checking. Everything is free! No minimum opening deposit, free deposits, free debit card, free withdrawals, free ATM cards, no minimum balance, free online banking, free online “Bill Pay,” free monthly online statements, free balance alerts, I’m telling you Sally, everything is free.” “What is the interest rate on this account?” wondered Sally. The teller answered with a big smile: “Oh, you can’t expect to receive interest on a free account. Hometown Bank would be losing money if we were just giving money away on a free account.” “Hmm...You mentioned free monthly online statements. I like paper statements because I actually balance my checkbook very carefully each month. Are paper statements free?” inquired Sally. The teller answered with a big smile: “Oh, there is a small $5 monthly fee if you want paper statements. You see, at Hometown Bank, we really believe in saving the planet, so we encourage our customers to opt for electronic statements.” “Five dollars each month is not exactly a small fee for a sheet of paper. That’s $60 each year. And truly, it won’t make a big difference for the planet since I will print my electronic statement each month. I guess it will save you 12 envelopes and stamps, but that’s the only difference I see,” reasoned Sally. “How about checks? You didn’t mention checks. They’re free with your free account, right?” “Oh, checks? You need checks?” The teller answered with a big smile: “Oh, there is a small $20 charge for your first 100 checks.” “I don’t understand, I thought it was a free checking account,” Sally wondered. The teller answered with a big smile: “Oh, but everything else is free!” There didn’t seem to be much room for negotiation. Sally gave in. After all, the teller didn’t make the rules—she was merely there to enforce them. So Sally opened her new checking account and deposited her first paycheck, with a sour taste in her mouth.
