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I remember when I was a kid in 2nd grade, as part of our math lessons, we were taught about the importance of saving, and the benefits of compound interest. It was explained to us that banks were in the business of borrowing and lending money. When we placed money in a savings bank, it was the same as a loan, and it would earn interest. The bank would then loan it out at a higher rate of interest. That’s how the banks made money. It seemed like a great concept. As part of the lesson, the teacher showed is how a deposit of $50 dollars, left alone in a 5% interest bearing account for 20 years, would result in a total of $135 dollars.

First of all, yes it’s true. At one time banks did give you 5 percent interest on your account. Secondly, to an 8 year old, 135 dollars is an astronomical amount. When she further showed us that if we added 2 dollars a week to that amount, over the course of 20 years, the account would be worth $3400 dollars.

I almost fell out of my chair. I couldn’t wait to get home to tell my mother the good news. Of course, she didn’t have $50 dollars to give me, but she did allow me to open a bank account through school with a $5 dollar investment. I can’t tell you how excited I was two weeks later when I finally received my Greenpoint Savings bank passport with the $2 dollar deposit in it.

On the back cover, there was a question for you to fill out. It said – “I am saving for ______________.

I wrote “The future.”

That bank account is long since drained of its riches, but I still have that passport locked away somewhere.

Recently, one of my friends was complaining about bank fees, and I sat up and took notice. Most of my adult life, I’ve worked for banks in one form or another and one of the perks is that you get maintenance free checking, so I never really paid attention. I didn’t have to.  Nowadays, you don’t really get any interest for savings or checking deposits; the last time I looked it was something like .25 percent. That’s a quarter of one percent.

Anyway, he explained that his account has a $25 dollar monthly maintenance fee. 40 years after I left the second grade, I almost fell out of my chair again, but for a totally different reason.  I immediately sat down with a pencil and did the math.

If you put $5000 dollars in an account earning .25 percent and charging you $25 a month, after 20 years, you would have…

Well, nothing… the 5 grand would run out before the 20 years was up. You’d end up owing the bank money.

The point is… how did we get to this point?

And more importantly, what the hell are we gonna do about it?