Walmart to Offer Low-Cost Checking Accounts
Walmart is once again expanding its products and services. After years of rumors about entering the financial services area, Walmart will now offer a low-cost checking account.
The mobile checking account will be offered as part of a partnership with Green Dot, and will be linked to a MasterCard debit card.
The program, known as GoBank, touts no fees for overdrafts or writing bad checks. No minimum balance is required in the account, and there will be a network of 42,000 free ATMs within the GoBank network.
In addition to making direct deposits, customers can put money into their accounts by taking a picture of a check with their phones or going to any Walmart location.
But that doesn’t mean the checking account is not without fees.
There will be a $2.95 charge for a starter kit which can be purchased at any Walmart store. There will also be an $8.95 monthly fee for the account, but that fee is waived with a monthly direct deposit of at least $500. There is a 3% foreign transaction fee, and any withdrawal at an out-of-network ATM will cost an average of $2.50.
But this could be an attractive alternative to a traditional bank, especially for the millions of Americans that are unbanked. According to a recent report, 25% of U.S. households live at least partially outside the financial mainstream, without bank accounts or using costly services like payday lenders.
The program is the first federally insured bank account that Walmart has offered. It has already tested the service in select locations late last year, and Walmart now plans to offer GoBank in more than 4,300 locations by the end of October.
“Many so-called ‘free’ checking accounts aren’t really free because they have high overdraft fees. In fact, an independent study by Bretton Woods estimates that consumers pay approximately $218 – $314 per year for a basic checking account,” said Steve Streit, founder and CEO of Green Dot Corporation and chairman of Green Dot Bank.