Answer:
The opening deposit has nothing to do with the charges assessed against the account for maintenance. Free checking is often used to lure in new customers that would not otherwise keep an account with a financial institution. Banks have become particularly clever about the marketing done in this area. For instance, one bank offered a "free" checking account if the opening deposit was at least $50, and if the depositor opted not to get back their canceled checks, and used only the depositor's bank ATMs to deposit and withdraw. If they did all these things, then their account cost them nothing. The bank also offered to credit the account 25 cents up to four times a month (for a total of $1.00) if the ATM was used for deposits. In that case, not only was the account "free", but also the customer could make $1.00 a month profit.
First published on BankersOnline.com 11/3/03
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