Retired and Need a New Bank?

When you retire, you live on a fixed income that most likely comes from your savings and Social Security payments. It’s important to find a bank or credit union whose financial products and services align with your new financial needs, such as lower fees.

According to Bruce McClary, the senior vice president of communications for the National Foundation for Credit Counseling, retirees’ main concern is finding a financial institution that “truly understands the challenges seniors face when managing a limited budget.”

So, what do retirees need in a bank? US News My Money has the answer.

What Retirees Need In A Bank

There are several factors that retirees should consider when they start shopping for a new bank, including:

 

  • Flexible terms and conditions, like affordable minimums for bank accounts
  • No monthly charges
  • Free ATM withdrawals and other complementary services
  • Free checks
  • Convenient branch locations
  • Investment services

 

Because retirees live on a fixed or limited income, McClary notes that it’s usually more important to have the tools to make their money work for them versus younger customers. So while younger customers may look for a bank with competitive APYs and interest rates, retirees want to save as much as possible.

“Some banks do a better job than others when it comes to providing access to programs that promote financial well-being and provide assistance with budgeting,” McClary told US News My Money.

Evan Kulak, the co-founder of financial planning company Polaris Portfolios, observed that retirees’ major obstacle is extended periods of historically low interest rates. Because the Federal Reserve will likely keep interest rates low for a couple of more years, it will be difficult for retirees to earn enough returns on fixed-income financial products.

“Retirees are looking for products that offer safety of the principal amount, access to funds and a competitive yield,” he remarked. “Banks are attempting to meet retirees’ income needs by offering high-yield savings accounts and attractive certificates of deposit.”

Retirees And Online Banking

Retirees who are more tech-savvy and don’t need to visit a branch in-person may find that online banks are a viable option to manage their money. In the era of the coronavirus, online banking is more important for seniors than ever. Banking from the comfort of home isn’t just more convenient. It’s also safer and reduces the chance of transmission. 

Best Banks For Retires

Seniors need a bank or credit union that doesn’t come with monthly maintenance fees or minimum balance requirements, especially if they don’t get direct deposits. Ideally, a bank should offer competitive interest rates for savings accounts, too.

Some may not feel inclined to open an online bank account. Other retirees may need a bank with direct deposit to receive their Social Security checks, tax refunds, pension payments, and other benefits.

“In these tumultuous times, direct deposit helps retired seniors safely deposit their money faster and securely,” Kulak commented. “Banks that offer assisted online banking and comprehensive telephone banking services can provide a valuable and safe service for retirees.”

Here are the best banks for retirees, according to US News My Money.

 

Ally Bank

  • No fees for checking or savings accounts
  • No minimum balance requirement on savings account
  • 0.6% APY
  • Free checks

 

Discover

  • No monthly fee or minimum balance for checking or savings accounts
  • 0.6% APY
  • 1% cashback on up to $3,000 spent with a debit card 
  • Free checks
  • No penalties for insufficient balances
  • Overdraft protection

 

HSBC Bank

  • No monthly fees or minimum balance requirements on savings accounts
  • 0.1% APY on accounts with $15,000 or less
  • 0.05% APY for balances of $15,000 or more

 

Charles Schwab

  • No monthly fee or minimum balance requirement for checking or savings accounts
  • No limit to ATM fee rebates, international withdrawals, including
  • No foreign transaction fees
  • 0.3% APY on checking accounts
  • 0.5% APY on savings accounts

 

American Express

  • No monthly fees for savings accounts
  • No minimum balance requirements for checking or savings accounts
  • 0.6% APY on all accounts

 

Marcus by Goldman Sachs

  • Online banking
  • No fees or minimum deposit requirement
  • 0.6% APY
  • No checking accounts

 

TD Bank 60-Plus Checking

  • Free checks, money orders, paper statements
  • Must have a $250 minimum daily balance or pay a monthly fee of $10 
  • 0.25% discount for personal loans and home equity

 

Source
  • Chang, Ellen. “Best Banks for Retirees.” U.S. News & World Report, U.S. News & World Report, 15 Oct. 2020, money.usnews.com/banking/articles/best-banks-for-retirees.
Ian Schindler