Webster Five Pilots Safe Accounts

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In a climate in which high fees can make it hard for some low- and moderate-income customers to open bank accounts, Webster Five Cents Savings Bank is offering new ways to make it easier during 2011 by participating in a pilot program with the Federal Deposit Insurance Corp. (FDIC).

The bank was one of nine institutions to take part in the Model Safe Accounts program, which allows customers to open accounts based on debit cards, with no checks issued. The accounts allow only electronic transactions through point-of-sale terminals and automated teller machines, and they do not include overdraft or insufficient fund fees. A total of more than 3,500 accounts were created through the program.

At Webster Five, most customers signing up for the new accounts were "second chance" customers who had difficulty managing other types of bank accounts in the past. In addition, some young adults who weren't interested in using checks signed up for their first bank accounts through the program. The bank said it will continue to offer the accounts created for the pilot program.

Overall, 95 percent of savings accounts and 80 percent of transaction accounts created through all the banks participating in the program remained open at the end of 2011, a retention rate the FDIC said exceeded the banks' expectations.

(Photo courtesy of FreeDigitalPhotos.net)