Some Banks Assess Checking Account Fees to Recover Lost Revenue
When Congress passed regulations on the financial industry, banks warned the restrictions would cause them to raise rates and fees to recover the lost revenue. Banks have proved many times they weren’t bluffing. Banks have added a number of new fees in the past two years, and now they are testing fees on checking accounts, something that could affect millions of consumers by the end of 2011.
Free checking was a nice gift that banks used to attract customers, hoping it would lead to a deeper banking relationship with loans, mortgages, credit card, and mutual funds. But free checking is not “sacred”. Some banks started adding new checking account fees last year and a number of banks have followed.
Bank of America
Bank of America is testing a new fee system. It will divide customers into four groups and charge monthly fees based on how much money and how many accounts a customer has with the bank. The fees could range from $6 to $25 a month but customers can avoid the fees if they maintain a certain minimum balance, make a minimum number of deposits (both determined by account level), or bank in certain ways such as linking multiple accounts and credit cards).
Starting February 8, Chase will enroll new customers in Total Checking. The monthly fee is $12 but it can be waived if you maintain a $1,500 balance, make $500 in monthly direct deposits, or keep a $5,000 balance across your deposit accounts. Older accounts will get a $6 monthly fee that can be waived with $500 in monthly deposits or if you make five debit card purchases.
Chase is also increasing fees on some account activities. According to the Chicago Tribune, ATM and debit card withdrawals at non-Chase ATMs will cost $5, up from $2. It will also charge $1 to print recent account transactions at ATMs for most customers. Overdraft protection fees are rising from $10 a day to $12 (waived if the account is overdrawn by $5 or less). The insufficient funds fee is increasing from $10 to $12. Outing wire transfers will cost $30, an increase from $25. Online transfers jump from $20 to $25. Stopped payment requests increase from $32 to $34.
Last fall, Citi stated charging monthly maintenance fees. The basic checking account now has an $8 monthly fee that is waived after a minimum of five transactions each month. A higher level account charges $20 each month if you don’t maintain a $6,000 balance across all linked checking, savings and investment accounts.
Starting February 3, Wells Fargo will replace free checking with an account that charges a $5 monthly maintenance fee and a $6.95 monthly online bill pay fee. This is for new customers and fees can be waived if a minimum balance or other requirements are met.