You can thank millennials for your free checking account

Just as quietly and mysteriously as it began, America’s antipathy for millennials disappeared.

After years of trend pieces about “Generation Broke,” Gen Y has risen above its festering reputation. Why? Quite simply, millennials are better with their money than you are. They save fastidiously, contribute to their 401(k)s and think things like “Am I going to be house poor?” — which isn’t exactly groundbreaking but also isn’t something a lot of Americans concerned themselves with a decade ago.

With all the buzz about what millennials are in the process of changing forever — the wine industry, for one, the work place, the Republican party — it’s no wonder that this generation has already left its mark on consumer banking.

Most people are wrong about millennials’ biggest contribution to the financial space. They assume it’s a dip in mortgage originations or the popularization of mobile banking.

Both are true — but there’s one banking product that millennials have actually saved from the brink of extinction, without even realizing it: the free checking account.

It doesn’t look exactly the same as it did five years ago. You probably won’t be writing checks or visiting a branch to deposit cash. But if you’re OK moving most of your checking online, you’ll likely be able to avoid fees completely.

Why the Free Checking Account Disappeared in the First Place

Don’t get too excited; free checking accounts are still relatively rare at national banks, and have been for half a decade. Back in 2009, 76 percent of all noninterest checking accounts were free; these days, that number is closer to 38 percent, according to The Associated Press.

This is because, in the year following the financial crisis, the federal government started to regulate one of the biggest cash cows for national banks: fees. For the first time, banks were limited in how often they could charge overdraft fees and how much they could penalize merchants for debit and credit card transactions.

To make up lost ground, financial institutions began to the raise the dollar amounts of ATM and overdraft fees. The “$35 cup of coffee” became a thing; Americans were spending almost as much on overdraft fees as on household appliances, according to the Center for Responsible Lending. And, of course, fewer and fewer banks offered completely fee-free checking accounts.

How Millennials Treat Checking Accounts Differently

Young people don’t generally write checks. Gallup found 72 percent of millennials use online banking services weekly – compare that to the 21 percent of Gen Yers who have never paid a bill with a check in their lives, according to a Western Union study. Meanwhile, 64 percent of millennials receive at least half of their bills electronically.

Despite this disdain for traditional checking features, Gen Yers tend to keep a fair amount in their checking accounts. This might be because they have more debt than other generations, and therefore more monthly bills to pay, according to a 2014 TD Bank survey. With an average balance of more than $2,240, millennials are one of the more liquid generations: somewhat behind boomers ($3,447) but ahead of Gen X ($2,081).

Because of this high liquidity — a combined $2 trillion, per Forbes, and $7 trillion by 2020 – millennials are pretty attractive customers for financial institutions. Not to mention, banks and credit unions are looking to snap up younger consumers now so that by the time they’re ready to buy a car or a home, they’ll have some brand loyalty.

Millennials are, in short, kind of a big deal, and financial institutions are bending over backwards to accommodate them. Luckily, when banks court Gen Y, everyone else wins, too.

Why Free Checking Came Back

Banks and credit unions are now rolling out a new breed of free checking: a digital account that only charges fees for more traditional transactions, like check writing and paper statements, according to The Financial Brand. Forgo these features, and the account will be truly fee-free.

It shouldn’t be too hard. Millennials are famous for being attached to their smartphones, but all generations are increasingly using online and mobile banking, and they seem to prefer it, too. A majority of boomers, for example, bank online, according to a 2013 Gallup study. Seventy-one percent bank online weekly, right in line with millennials.

Where to Find Free Checking

You’ll still want to look first to community banks and credit unions, which traditionally offer lower fees to their members; the caveat, of course, is that these institutions sometimes have restrictive member bases.

Navy Federal Credit Union is one cooperative that offers an e-Checking account — members of the armed forces (the institution’s purview) won’t pay monthly service fees as long as they set up direct deposit, and also receive ATM rebates up to $10 per month.

National banks are also beginning to offer these types of accounts, including Nationwide, Capital One and Mutual of Omaha. And if you skip brick-and-mortar institutions completely, a host of online-only banks offer free checking and, more often than not, they’ll reimburse ATM fees. Check out Bank of Internet or EverBank, to start. As long as they’re FDIC-insured, you’re good to go.

Take one last piece of advice from our famously cautious millennials: Read the fine print. Banks are required to disclose any dollar amounts they will ding you for, and a checking account isn’t completely free unless the bank says so, explicitly.

ad-high_impact_4
Business
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like