Banks Testing Out More Fees

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Bank of AmericaLast year, the furor over Bank of America’s proposed $5 a month debit card fee slowed some of the efforts by banks to introduce new fees. However, even during that time, some banks were quietly testing out account fees in limited markets. Those market tests are expanding, and banks continue to roll out new fees — especially on checking accounts — gradually.

The new round of fees aren’t as straightforward as a flat monthly fee, though. Instead, banks are instituting account minimums that result in fees if they aren’t met. Keep an eye out for some of the new bank fees that may be coming your way.

Wells Fargo and Bank of America Testing New Fees

Two banks leading the way in testing out new fees are Wells Fargo and Bank of America. Both of these financial institutions offer some version of free checking, but that is beginning to change. Recently, JPMorgan CEO Jamie Dimon said that it costs a bank $300 a year, on average, to maintain a checking account. Banks think that they can get better value by rolling out new fees and restrictions on the checking accounts.

Right now, Wells Fargo is expanding a test of its fees to include more states. In 2010, Wells Fargo began charging fees on new accounts. Last year, the bank began charging existing customers in certain states for their checking accounts. Now, Wells Fargo is quietly expanding the practice. However, there are ways to avoid the $7 monthly checking account fee on the “Essential” account. You can have the account waived if your daily balance is at least $1,500, or if your monthly direct deposits equal at least $500. You do get a $2 discount for receiving online statements, instead of paper. So far, the gradual roll out has been fairly low-key.

Bank of America is also testing new fees. The debit card fee might have failed, but Bank of America is testing new checking account fees in three different states. Bank of America is trying out different services, and trying programs that waive monthly fees when customers have more products from the institution, maintain minimum balances, or do their banking online. The idea is to reduce the overhead associated with checking accounts — something that banks claim is more important now that there are limits to fees they can charge.

Is Your Bank Rolling Out New Fees?

You need to be careful, reading the fine print on your bank statements, and double checking the information sent to you. Just because you aren’t at Bank of America or Wells Fargo doesn’t mean you’re safe. Even my local credit union recently announced a monthly checking fee. These fees aren’t terribly obvious, though. Instead, they are more laid back. You have to meet certain conditions to avoid the fee. Only if you fail to maintain a certain balance, or neglect to carry out a minimum number of transactions, do you have to pay a fee. But the fee is still there, and the minimum balance is creeping higher.

Before you get too comfortable, verify the fee situation with your bank, and determine whether or not it’s time to make a switch.

(Photo: I-5 Design & Manufacture)

{ 10 comments, please add your thoughts now! }

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10 Responses to “Banks Testing Out More Fees”

  1. Salvatore says:

    About a week or two ago, I got some mail from Perkstreet related to overdraft fees. I opted out of the overdraft fees, so in theory, if I was to overdraft my account the transaction would be declined and I would not be on the hook for a $32 fee. There is now a returned item fee! This fee is also for $32 and you are charged it any time you you try to spend money that you don’t have have. So, now the bank will charge you $64 if you have overdraft protection and $32 if you do not. This fee can be easily avoided, but I am not happy that it exists.

  2. Jim says:

    Banks are in the business of making money and this appears to be how they plan on doing it these days.

    • Matt says:

      You would think that would drive people to online banking and destroy brick and mortar banks but I guess some people dont trust online banking or dont care.

  3. Master Allan says:

    My trick won’t work forever. Given the recent changes it may not even work at year’s end. My too big to care local bank, U.S. bank, has a similar checking policy.

    Slowly moving to 100% online with ING electric checking I still desire to keep my local bank around for the rare check or to fetch rolls of quarters for the laundry room. Starting a new job I instructed payroll to deposit $250 per paycheck to US bank and rest into ING direct. I therefore meet the free checking $500 / month direct deposit limit.

    Oh I dislike that bank. I get paid tomorrow and will immediately make a $250 payment to my credit card… So far this works!

  4. Sadie says:

    New fee on Health Savings Account @ Credit Union effective 1/1/2012: $3.00 monthly fee irregardless of balance.

    So much for choosing this source as an effective savings account on a dormant HSA account! Dormant by choice as is tax free.

    Institution prefers to penalize me for depositing monies with them.

  5. Sadie says:

    1/1/2012 Credit Union began charging $3 per month on Health Savings Accounts.

    With HSA accounts being tax-free, my account was dormant precisely for that purpose.

    So much for choosing this institution to be my choice!

  6. Thank you, Dodd/Frank……. more unintended consequences. Banks are in the business of making money for their shareholders, and when one revenue stream is cutoff or reduced, they will find another.

  7. reducereuserecycle says:

    I don’t believe JPMorgans $300 a year cost to maintain a checking account.

  8. Stephen says:

    Maybe if banks and credit unions (I am looking at you Municipal Credit Union here in NYC) would stop wasting / throwing away money on naming rights for college bowl games, stadiums, golf events, etc, they wouldn’t need to branch out into underhanded/sneaky ways to make money.

    For the record, I go out of my way to avoid doing business with any company that is what I call a corporate john. It’s difficult and I don’t always succeed, but when I have a choice, I pick the non-naming rights company. Later on this year, I will be investigating getting a new homeowners insurance policy since MetLife is now the corporate john for the joint in meadowlands. See how that works. They think people will sign up because they are a naming rights company, but not me. It’s not easy though to switch out from a bank though, so for now I am stuck with Citi.

  9. Carol C. says:

    Great post and so true. Banks are searching for fees everywhere, not just in checking and savings accounts.

    I have a friend who had a SEP-IRA with Wells Fargo, but moved it because WF was going to start charging $125 maintenance fee, later this year, for something that had previously been free.

    -Carol C.

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