November 29, 2006

Herndon's definition of institutions, or why you shouldn't save your money in the bank

In Herndon's How to Survive in Your Native Land, which Borderland reminded me to read, he defines institutions as places to do things "Where Those Things Shall Not Be Done", and gives an example of a savings bank: "you want to save money? Stash your bread under the mattress! Bury it in the back yard! **** you!"

I roared. How absurd. Of course you can save money in a savings bank.

Then I get a letter from my bank today: "From 1 January 2007, we will require all our customers to maintain a relationship with us of at least 25,000 or currency equivalent.... If your minimum 'relationship balance' is not maintained then, in order to cover the costs of servicing and administering your account, a 20 pound (or currency equivalent) monthly service charge will be deducted from your account."

Just 6 months previously, they had introduced this new service charge, levied on any account with less than 3,000 pounds in it. Then 6 months later, the bar is raised to 25,000...

My first thought was, I'd be better off withdrawing my funds, closing my account, and stashing my measly hoard under the mattress. Then I remembered Herndon's words...

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