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An Illinois Teenager's Bank Fees Spiral Wildly Out of Control

Sometimes your bank savings account doesn't always add up.

Bank fees. Ssssss. Icky. It’s happened to you, it’s happened to me, and it may have even happened to your kids, mostly with savings accounts. Their balance drops slyly, insidiously, until one day, the little balance they have in there is wiped out, and then some, by a nasty maintenance fee. 

It might overdraw the account by only a few pennies, but if you don’t pay attention, that tiny negative balance is going to be assessed with a service charge of approximately $30. 

And now that it’s $30 and change overdrawn, some banks (not all) charge them that $30 service fee daily. A letter generally comes in the mail, but it seems as if those letters are extremely slow in getting to your house. It is this writer’s opinion that the leisurely speed at which the letter arrives allows the fines to accumulate. Hey, just sayin’. 

The fees build and build until one day, you find yourself regaining consciousness on the kitchen floor after opening up the latest statement from the bank. (Parent’s note here: This is IF you see the bank statement at all. Some children *cough* seem to hide mail from time to time, possibly negating any chance of a parent finding out in time to help.) 

Is this fair? No, but it happens. It happened to a teenager recently in McCullom Lake, Ill. His mother decided that he should open an account to learn some financial responsibility, so he opened a savings at a local bank and, as a bank balance invariably does with teenagers, it dropped to under $5. 

According to the article, with such a low balance he pretty much ignored it. That fine print they would like you to read sometimes slips through the cracks and this time was no exception. 

Bottom line: $229 in service charges in two weeks. Boom

Take caution, parents. If you don’t know the rules, regulations, ins and outs of savings and checking accounts (in this case, it was savings), this could happen to your child. 

About five years ago it happened to my son, 18 at the time, who opened an account that had a debit card. (I can hear the collective gasping from here.) Needless to say, he overdrew it once, and that’s all it took for the fees to spiral out of control. Daily. 

Luckily for my son, I found the letter from his bank hidden behind the toaster. It was not a happy night. Even the dog hid. At the time he just didn’t understand that they meant business. 

The Plainfield bank where this happened (names withheld to protect the innocent but kudos to the wonderful teller who helped out) was kind enough to waive the fees almost by 90 percent. I don’t remember what he ended up having to pay to settle and close the account, but his fees were more than $400 in just a little over a month’s time.  

The debit card was cut up and he hasn’t had one since. 

The moral of the story: When opening an account at any bank, read the fine print. Talk to the tellers about what would be the best choice for your teenager.  

Also, try to get to the mailbox before your kids do. Trust me on this one.

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Jim W March 22, 2012 at 12:40 PM
Great cautionary tale, however it is the personal bankers, not the tellers, who you want advising you on your accounts.
Christine Cacciatore March 22, 2012 at 01:32 PM
so true!
Tim March 22, 2012 at 07:49 PM
Looks like the lesson was learned better than expected, for both of you. Do not put money in banks for the purpose of starting out in saving. Direct deposit Checking accounts, with a consistent balance over 3 or 4 thousand dollars will avoid most monthly fees. But for savings? With 0.001% interest being paid on it, if at all, it makes more sense to put it in the safety deposit box than into a savings account. At least that way, you will never owe them MORE than you gave them to begin with. Banks haven't been a place to save money for going on 30 years now. The only purpose they serve is to increase their bottom line, not yours. Also, to be a disbursement account from an incoming stream of paychecks. Try a credit Union instead of a bank, the options and treatment are much better. Especially for someone just starting out and needing to learn financial responsibility. For example, you make it sound like they did you a favor by cutting their insane fees by up to 90%. (90% of insane, is still insane) This is not something to be praised on the part of the bank, and anywhere that will cost more money than you have deposited over ANY amount of time, is a place you should be running from at full speed.
Christine Cacciatore March 22, 2012 at 11:17 PM
"With 0.001% interest being paid on it, if at all, it makes more sense to put it in the safety deposit box than into a savings account." (unfortunate but true.) and also: "90% of insane, is still insane" (so funny) and also: "anywhere that will cost more money than you have deposited over ANY amount of time, is a place you should be running from at full speed." (full speed and then some.) Said child now just has a checking account, which has no fees associated with it whatsoever to maintain. At least some lessons stuck with him.
Leslie Ann March 26, 2012 at 08:12 PM
Great advice!
Baba O'Riley March 31, 2012 at 06:25 PM
Credit Unions...

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