Wal-Mart Stores’ introduction of low-cost checking accounts could herald a shift toward more checking accounts that help cash-strapped consumers to avoid high-cost overdraft fees, consumer advocates say.
The retail company began to offer GoBank checking accounts through a partnership with Green Dot Bank nationwide in September 2014. The GoBank account includes a $2.95 activation fee and a monthly maintenance fee of $8.95 unless the consumer directly deposits at least $500 per month into the account. It disallows overdrafts.
Although Bank of America’s SafeBalance account that doesn’t charge overdraft fees beat Wal-Mart to the punch, the retailer’s entry is significant because of its vast retail reach, says Greg McBride of Bankrate.com. Tom Feltner, who is the director of financial services at Consumer Federation of America, predicts that more banks will consider similar accounts.
However, Nessa Feddis, who is a senior vice president and the chief deputy counsel for consumer protection and payment for American Bankers Association, says overdraft fees won’t go away. She says some consumers consider certain bills, such as a mortgage, too important to go unpaid in case of a low balance in a checking account.