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Friday, 12 July 2013 07:05

If You Put $250 in a Chase "Savings Account," You'll Get 12.5 Cents in Yearly Interest -- And Maybe Charged $4 a Month

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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

bank337 12If you are a working stiff and can squirrel away $250 to put in a Chase "savings account," Chase will pay you 12.5 cents a year (.05% APY at a "standard rate"). Furthermore, if you don't make any transactions, they will charge you $4 a month, meaning that you will be left with $202 at the end of a year, plus your 12.5 cents.

It's all right here on a Chase website marketing page for what is called "Chase Savings." But a closer look at the fees and disclosures page indicates that if you are a consumer not used to reading the footnotes, you could end up losing your savings through add-on fees (including potentially the $4 a month "service" fee).

The oligarchy doesn't keep its money at Chase we bet, at least in savings accounts. We doubt that JP Morgan Chase CEO Jamie Dimon has a standard savings account at his own firm, the parent company of Chase. Why? Because according to the Chase rate chart, any sucker who puts $5 million into even the premium "Chase Savings Plus" still only gets .15% interest. To break that down, that would equal a $150.00 return on every $100,000 lent to Chase each year. Do you think Dimon is a master of the universe with those kind of investment returns?

We call savings at Chase lending because the bank takes your money and charges credit card holders up to around 30%, yielding enormous profits at your expense and the indebtedness of the credit card holders. Meanwhile, you end up as a "good" American saver with literally pennies in interest on your nest egg.  Consumer savers at banks like Chase are paying for providing the banks to big to fail with the capital to lend out funds at usurious interest rates for a variety of purposes -- or financing their risky investment ventures.

These practices of saver subsidies may explain why Forbes reported on July 12:

The U.S. economy is recovering, and the country’s biggest banks are certainly participating in the comeback.

JPMorgan Chase delivered second-quarter earnings that easily beat the Street’s consensus estimate Friday morning.

The banks, we think, will argue that the consumer savings interest rates are low because the Fed is keeping interest rates suppressed in order to boost the economy (although there are indications that such a policy will change in the near future).  However, the banks too big fail are not, by most accounts, reinvesting heavily in America -- either in loans for manufacuturing or small business loans -- and they are racking up profits by lending out money to debt-ridden consumers who can't afford to get ahead financially because pay (adjusted for inflation) for workers has plateaued for nearly two decades. In fact, blue collar worker pay is decreasing in buying power due to the shift to lower paying jobs in the US.

I personally received a flyer from Chase that offered $100 to deposit $10,000 for 90 days "into a new or existing Chase Savings account." In the small print, the advertisement notes: "The APY is 0.01% for all balances in all states. Interest rates are variable and subject to change. Additionally, fees may reduce earnings on the account."  This is a verbatim quotation from a section in small type entitled "Bonus/Account Information."  A section on "Service Fee" details the conditions under which the savings account holder would be charged $4 a month.

Considering that 400 families in the US own as much as the combined salary and assets of 50% of the US population, it's a given that those with minimal financial resources are literally being taken by the banks too big to fail.

That may be why, as BuzzFlash at Truthout recently reported, the large banks are pushing for a bill to take away the tax-exempt status from credit unions.  That is because perhaps as many as nearly a third of Americans are now using credit unions for their banking needs.

What is important to remember about credit unions is that they are essentially cooperatives; they have no shareholders. They are tax-exempt because no individual is an investor or profits from the financial institution except for the members.   In this case, the members are the people who bank at the credit union -- and the board and staff of the organization are beholden to the consumers.  

This dearly threatens the likes of Jamie Dimon and his cohorts for whom the amassing of gargantuan amounts of money is their "contribution" to society.

When you review what Chase, under Dimon, offers people who use their savings accounts for storing money, it appears more like a legal scam than any economic boost to society.  In fact, it leaves savers losing money just on the basis of inflation, as the banks yield enormous profits with the deposits of hardworking Americans.

There used to be a time when saving money at a bank earned you interest and your money was leant out to build up the community and the local economy.

Now, it's just more or less a rip-off for all but the most savvy and ruthless investors. 

(Photo: HowardLake)