They are perfect solutions for the poor and underbanked... whatever that means. Small fees, small charges, impossible to rack gazzilion dollars in penalty fees.
I'm 26, and I've never written a cheque. Public schools over here have (or at least had, not sure how it works today) programs where every student would get a bank account in the first grade with no fees (until they finished study). You'd actually bring in your bank book and deposit money (you did have to visit the branch to withdraw with a parent to sign for it). Once you reached 13 years, you could get a debit card (this was 2003 for me), and then I got Internet banking when it started getting popular in 2006 (I was in the 10th grade). Internet transfers have pretty much always been free and are usually overnight (or immediate if it's to another account at the same bank).
By the time I graduated University, and would have had to start paying fees, the state of bank competition meant that it was pretty rare for any personal banking to charge fees. I now have three personal transaction ('checking') accounts and two savings accounts across two different banks, and none of them charge fees (My company account is the exception, at $10 a month).
Pretty much everybody here has bank accounts, so cheques are pretty much unheard of (mostly used by people over 60), everybody is paid into bank accounts, you pay taxes and bills electronically, etc... Surely it's similar in Europe? The US just seems like a different world.
I think those are actually promotional programs run by the banks (but I agree they're a good thing). I'm 10 years older, but we were all given Commonwealth Bank Dollarmites accounts. There's more info on the Dollarmites program here, apparently schools get affiliate fees & commissions for every deposit the children make ($5 for every account opened, 5% commission on every deposit):
https://www.commbank.com.au/personal/kids/school-banking.htm...
> the state of bank competition meant that it was pretty rare for any personal banking to charge fees
That might have changed, last time I checked the major Australian banks all (except NAB) charged a $5 monthly fee, unless you agreed to setup an automatic monthly deposit of at least $2000. You used to be able to get fee-free accounts so long as you maintained a minimum balance level.
I still have the plastic piggy-bank somewhere (and a Fat Cat one, to really date myself).
By the time I went to uni, I had enough saved for a brand new Pentium Celeron system. It sure helped that interest rates were 10-15%…
We're probably a similar age, I met Fat Cat on an Ansett flight once ;)
But clearly customer acquisition at a young age is huge for banks - I'm part of a focus group for Westpac, and recently they tested several different designs for piggy banks.
(Another initiative is already public, where they've giving $200 to every child born in Australia this year. Catch is, the parents have to open a Westpac account to claim it, and the money can't be withdrawn until the child turns 18.)
Commonwealth bank was government owned at the time.
Looks like you're right on fees - I didn't realise. One (NAB subsidiary) doesn't have fees, and for the other two transaction accounts I don't get charged the $4 p/m fee because I have my salary put into the savings account they're linked to.
I explained it to Korean coworker that our debtors prison is implemented as a house arrest or like an economic parole release.
So if you owe child support because you're unemployed you can't use a bank because the money would disappear. You can't get money from a job in the system it would disappear so cash pay please. Or you can't go to the courthouse and get it fixed because lawyers cost money and see above you're unemployed. Once you're in debtors prison there's a whole bunch of things you can no longer do, just like being under house arrest or parole. For example, for a couple decades 90s-10s we had universal default as a stated written policy. We still have it, just unstated, which confuses foreigners. On paper we don't have universal default since 2010 or so. In practice we still have it today, more or less.
Adding to the complexity we do have actual debtors prisons most famously in the rural south but to some extent or another there are some everywhere.
I guess another way to explain it is part of our culture is explicit and written and people read it, like generally speaking the bible or the -ez single page income tax form. Then there's a layer thats written and people make a great show of not reading like mortgage or car loans or insurance contracts. Next down there's unwritten stuff that people understand like the debtors prison thing is I think fairly uncontroversial and reasonably well informed. Below that there's stuff we kinda unconsciously by osmosis know, like the "unbanked"="house arrest debtors prison" or "underbanked"="financial equivalent of parole complete with abused arbitrary rules". At the bottom there's weird esoteric stuff like non-propaganda related economic theory and history. And the level of awareness is extremely uneven across the entire nation (fairly uniform across subcultures, mostly).
> No overdraft/credit/direct debit bullshit
> to be concerned with
They (the banks) pass the security and processing to the CC systems instead of a unified debit network (that is still around).
When I got my first fancy visa debit i was told if i used it as a debit card, I'd get charged 25 cents, but if used it as credit there were no transaction fees. This was back in 2001-2 ?
I bank with a local(ish) bank that is growing, I have a free checking account and have for a very long time. They've also been really good to be about waiving fees, etc, though part of that is being on a legacy account older than I am. However other friends and family have reasonably similar experiences.
They're also still offering a free checking account: https://www.huntington.com/Personal/checking/asterisk-free-c...
And "checking account" doesn't mean "with this account I write a lot of checks." In the US there are general two types of accounts, checking and savings. I haven't written a check on my US account in over 15 years.. Though in France I probably write a few paper checks a month.
My point is that "checking" account is just a terminology -- the vast majority of people don't write checks (unless you're over the age of 80.)
It's what you might call a "salary account" in other places then. It's where your pay(check - haha) ends up, and what you use for regular day to day transactions such as paying bills.
I also get confused when abroad and there are buttons to withdraw from "checking" "savings" etc. I have a handful of accounts that I name myself so it's always hard to know.
UK => Current Account
AU => Transaction Account (although my bank brands it as an 'Everyday' account)
The worst thing about US Checking accounts is that they don't come with checks, and you have to arrange with a third-party printer to get a book of checks sent to you.