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Running The Numbers

Guest Column
Christopher Lin

When I arrived on campus in the fall of 1995, I was ambushed, along with the rest of my class, and just like every class before mine for as long as anyone can remember, by the traditional BayBank enrollment party encamped in the Student Center lobby. As far as I could tell, there was only one bank anywhere near campus, and that was BayBank. Not knowing any better, I signed up and borrowed $2,500 from my parents to put in a certificate of deposit (at about 4.5 percent) to qualify for the “Classic Value Package,” which exempted me from any fees.

BayBank merged with Bank of Boston soon after that (to form BankBoston). By the summer of my sophomore year, 1997, I started seeing $10 deductions from my monthly statements. I went back through the pile of letters and brochures, which I hadn’t read, that the bank had sent to me over the past semester and discovered that money held in a CD now counted at a 50 percent discount towards my minimum balance requirement. I wasn’t about to permanently leave $2,500 in a savings account paying only 2 percent, or ask my parents for another $2,500, so I opened a new account at U.S. Trust and put the CD money in a stock mutual fund that has done about as well as other stock mutual funds have done during our current economic boom (certainly better than 4.5 percent).

I was enraged at what I saw as a betrayal by BayBank. In fact, I was so enraged that in a fit of activism I actually joined the Undergraduate Association. I set out to “bring down BankBoston,” but settled for getting alternate banks to advertise in the Student Center and publishing a banking information brochure. These banks wouldn’t be allowed to actually open accounts on campus -- because of peculiar contractual arrangements between MIT and BankBoston -- but they were allowed to pitch their wares. U.S. Trust and Cambridge Trust leapt at the chance. BankBoston’s personnel were joined by the competition’s when the next batch of suckers, the Class of 1997, was herded into the Student Center for the beginning of their glorious years here at MIT.

Now I find myself, nearly graduated, facing another bank merger. This time, I’ve paid much closer attention to the reams of literature sent by my bank to assure me that it still cares about me. My attentiveness was rewarded when I received my new terms and discovered that, yes, indeed, I would have to pay more for banking. This was no surprise; in fact, I had already initiated changes to allow me to switch to a new financial institution quickly and easily.

By the way, Citizens Bank has a cheaper checking option (“Basic Checking”) than the one Tech reporter Laura Moulton [“Merged Citizens, U.S. Trust Drop Free Checking Option,” Feb. 4] managed to get out of its customer service representative, and their no-fee ATM use is not exactly no-fee (read the fine print on ATM use within the SUM alliance).

Summer 2000 will find me in the San Francisco area, basking in the sun and putting my money into an account at my new financial institution. This financial institution isn’t actually a bank. It’s a brokerage firm that allows me to write checks on my cash account. Am I rich enough to have an account that’s profitable for the firm? No, but apparently my Brass Rat told them I will be, so they took me anyway.

There are still a lot of banks in the area. In addition to the ones I’ve already mentioned, Cambridge Savings Bank, Wainwright Bank, and Sovereign Bank (which will take over all Fleet branches when the Fleet-BankBoston merger is finally complete) spring to mind. Though I’m not ready to trust them, there are also Internet banks. And there are other institutions, such as credit unions, that offer bank-like services and sometimes much more.

Take the time to research your choices. You’ll learn a lot about what you can do with your money other than paying $11 a month to let it rot in a low-interest checking account. Remember, it’s your money, and the only person who really cares about keeping it yours is you.

Christopher Lin is a member of the Class of 1999.