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Penalizing pint-size accounts

A penny saved may be a penny earned, but many large commercial banks are now telling penny savers not to bother. Through a variety of fees and interest penalties, the giants of finance are actively discouraging small savings accounts.

New York's Chase Manhattan pays no interest on most passbooks whenever the balance drops below $100. United Jersey Bank, the Garden State's second largest, will slap a $2-per-quarter charge on any account that averages below $100. Chicago's First National Bank allows only one free withdrawal per month from passbooks holding less than $500 and deducts $1 for each additional transaction.

Bankers complain that soaring interest rates have put them in such a profit squeeze that they are looking for any way to economize. Because of administrative expense, accounts under $100 are generally money losers. Bank executives insist that they are not trying to drive away customers with only small change but to encourage people to save more regularly and to consolidate multiple passbooks.

What about the "small" saver who wants to set aside 25-c- or so from his allowance each week? Bankers blush at the thought that they might be thwarting grade-school thrift, and some have moved to exempt children from the new fees. New York's Manufacturers Hanover, for example, waives for minors the $1 quarterly charge on pint-size accounts. But if the pressure on banks to streamline their operations continues to grow, the kids, and many of their on-the-brink elders, may find that a piggy bank is the best they can do. qed

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