Answer: 1969.

Good opener to this 1,000 word article (about 5 minutes reading time) on the history of banking from NerdWallet. Here are a few interesting points (some of which I even remember!):

• During Civil War, government levied a tax on the use of banknotes
• FDIC originally insured deposits up to $5,000 in 1934 (that would be $91,000 in today’s dollars)
• Banks used to give out appliances to encourage consumers to set up accounts: “New customers received prizes when they opened new accounts — if you walked into a bank with a deposit in those days, you might leave with a toaster or an electric wall clock.”
• Banks actually used to pay out interest on savings accounts. We have been in a low-interest rate environment for about a year now.
  • “In 1957, people could earn 3% interest. By 1986, some passbook savings accounts paid over 5%.”
  • I can recall earning 15% per year on a 5 year CD during my youth. Taught me a great lesson in compounding interest!
• Most people still like to visit bank branches:
  • “But don’t write off brick-and-mortar banks and branches just yet: In a 2016 study from the consulting firm Bain & Company, 92% of respondents over the age of 65 and 84% of people aged 18 to 24 said they had visited a teller at least once in the previous quarter.”

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Interested in bank accounts? Check out this NGPF Activity on Selecting a Checking Account

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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