In many countries, it is not uncommon for the postal service to offer savings accounts. These often serve low-income populations with small savings who may not get the best deal from checking accounts geared toward salaried 9-5ers. The U.S. Postal Service formerly had such a system, offering savings accounts from 1911 – 1966 that paid out 2% annually on deposits.
This might be just the moment to reinstate a postal savings account system. Personal savings are increasing while banks are cutting down on the freebies and easy access to checking and savings accounts that proliferated before the economic downturn (free checking and savings accounts are often only for students and direct deposit users). Free and easy bank accounts could go a long ways towards reducing the poor’s reliance on check cashing services that skim off a percentage of their earnings and could increase their personal savings rate.
There’s also the small matter of covering the gaps in USPS’s operating costs with the dividends of conservatively investing those deposits. As long as the Postmaster General doesn’t take your savings account to the dogtrack or chuck it into CDOs, things should run just dandy.
The Postal Service already has 32,741 locations (give or take a few hundred). Slap in an ATM or two at each, add an extra window and you’re on your way. Further, think about converting some of those blue street corner mailboxes into hybrid ATM/automated postal centers and postal banking could be an instant institution in every major American city without paying a dime extra in real estate costs.
Adding banking would also make post offices much more of a draw, creating a convenient hub for all manner of government services. The post office already handles passports, why not farm out some of the other basic citizen-government interactions to a satellite location? This especially makes sense as that the neighborhoods that need the most services are not always convenient to the downtown government buildings but would likely have at least one branch of the USPS. Kiosks with video conferencing and a scanner could skip the need for moving the staff out of those hulking downtown buildings while still extending services.