Banks provide a valuable service, but they always know how to make sure that they are profiting off of everything they do.

What would you do if your bank offered a great savings program, but then you learned that the fine print made it much worse than it seemed?

That is what happened to the grandpa in this story, so he crunched the numbers and made the account work in his favor.

Malicious compliance to a banks arrogant savings plan

Had to deal with a bank today and got pretty mad with their stupid procedures and policies (not the people that served me).

I literally started thinking about petty compliance to one of the topics and how well banks have protected themselves with legal documents and I remembered this golden story from my grandfather (may he rest in peace).

The story:

Grandpa was clearly a very hard worker.

So, my grandfather was at a point in his life, with a wife and couple of young kids, settled in an apartment and was working in a factory and painting houses.

He was working more than two 8 hour jobs, 6 days a week to provide as well as save money for the future and for the kids (and as it ended up the grandkids as well).

So, with about a double income, he was managing to put some money on the side each month.

He had gone to one of the local banks, and open up a savings account with a healthy interest (different times…).

He put in some money (about 5k$) and left it to grow.

This seems like a great deal.

A year later he went in the put in some more money and start a new “plan” for another year and the guy told him to go with one of their new plans where the interest was 2.5% (up from under 2% on the normal end-of-year paying plan he had) and this new plan was paying every day the interest, as well as he could add money each month, instead of once a year, before starting a new plan.

According to grandpa, even the fine print didn’t seem to have any negatives, so he went with it. about 7k$ at that point.

Old school technology was crazy.

3-4 months go by, and he goes in to add some money to the account and asks for the account movements to be updated (back then, you had a booklet, that they put in an old-style printer and it would add only what was not already printed. Brand new tech back then).

He gets his printout, and it is 4 months of daily +0$ interest added.

When you do the math 7000*0.025/365 you get about 0.48$ per day, that was not being paid.

He asked why after 4 months of “daily payments” his deposit was still the same and the clerk smirked back that the amount was too small. The system was not calculating cents, just whole numbers.

So, the bank is actually paying 0% APR?

So, with his amount being 7k, his daily payment was 0,48$ rounded to 0$…

He went to the director of the bank office and mentioned everything together with the fact that for over 100 days the bank had been keeping for itself 50 cents per day.

How was that allowed, because it was robbing the customers and the director just responded with ‘in our bank, individual offices have the right to operate semi-independently.

The bank obviously does this to maximize their own profits.

This is why we are able to offer such a competitive interest rate, whilst our bank doesn’t offer it officially.

We are allowed to set some rules for ourselves. If you don’t like feel free to change your position!. (change your position meaning not be so poor).

According to my grandfather he was furious and just stood up and left.

Went back home and read all the fine prints of the contract again, only to find that information so vaguely written, that it could have been talking about whether temperature calculations.

The malicious compliance:

He calculated the exact rate he needed.

He read it once more and two days later he went back to that office bank.

He added some money to get the amount to 7450$ and left.

No complaints, nothing.

He went back four days later to update his booklet with recent account movements and the system was paying 1$ every day.

Since he confirmed this, he went to the other banks he had accounts.

He was a smart man and did not want to keep all his money in one place, but now he was on a revenge mission.

He took out all his money from the other banks and went back and opened up 2 more accounts with that exact same amount.

Grandpa sounds like a smart man.

He also got the bank to pay those interest payments in a separate account, making sure that the amount was just right at 7450$. So, he started getting 3$ (1$ per account) every day.

That was in a period when he was getting paid about 7$ a day, for about 10 hours of work (or about 15, from his two jobs).

He was making more in interest than from one of his jobs!

This continued for so long, that with time passing and him saving more, he managed to get up to 8 such accounts, before they shut down that plan and changed it.

According to him that run for over 11 years.

The way this worked was him pretty much netting a 5% interest rate of the stupidity and arrogance of the bank, just because most people had under 7k$ in savings, so everyone subscribed on that plan was getting robbed, whatever they were owed.

If you can game the system in your favor, always do it.

He said that the interest rate fluctuated up and down a bit so he ended up getting the amounts up at 8k, just so he would be losing money when the rate was falling lower.

He said that according to his calculations he netter about 11k$ over what his money should have earned with that APY of 2.5%.

Sounds like it worked out well for Grandpa, but the bank was undoubtedly still making money on the deal.

Let’s see what the people in the comments say about it.

Yes, banks love working things in their favor.

Wow, this worked out very well.

Sometimes you have to play stupid games.

This person is happy the grandpa won.

Great job grandpa!

Finally, someone beats the bank at its own game.

We love to see it.

If you liked that post, check out this story about a customer who insists that their credit card works, and finds out that isn’t the case.