Last week, Bank of America caught a lot of flak for introducing a bunch of fees on their checking accounts. This week, it’s Citi’s turn and the fees will start in December.

• If you have a mid-level Citibank account, you’ll get a $20 per month fee if you don’t maintain a balance of at least $15,000 in your accounts, up from $6,000.
• EZ Checking account holders will now see a $15 per month fee if they don’t maintain at least a $6,000 balance and the EZ Checking package is getting phased out.
• Basic Banking accounts will see a fee increase of $2 to $10 per month, which you can avoid if you maintain a balance of $1,500 or make one direct deposit and one automatic online payment per month.

Today it’s Citi, last week it was Bank of America, tomorrow it will be another brick and mortar bank. It’s only a matter of time. If you want to avoid being forced to change banks because you want to avoid fees, start moving your banking now.

(Photo: redvers)

As we wrote about it last year, credit card issuers are instituting annual fees they are willing to refund if you make enough purchases in a year. The first issuer to start doing this is Citibank and recently sent notices out to cardholders about the $60 fee starting April 1st. If cardholders spend $2400 in a twelve month period, the fee will be waived. Consumerist has the full text of the letter cardholders received.

I received an email from a reader asking if I knew what she could do: “I am not sure if you have covered this topic but I got a letter in the mail from Citi cards that they are going to now charge $60 annual fee and that fees is apparently going to be waived at the end of the year if I make a tleast $2400 in a year in purchases. I have had this card for a couple years and used it once to do a balance transfer for 0%. I have a limit of $17,300.00 on this card. I am at a loss on what to do because I may not be able to make the $2400 in purchases because I use my high interest debit card for most of my purchases. My question is – if I were to close this account, how is that going to affect my credit? Will it? What are the factors I should consider before I close the account?”
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Last November, Citibank announced that anyone without an average balance of at least $1,500, by February 1st, in their combined accounts would have to pay a monthly fee or be subject to per-check charges. That didn’t sit well with people who had just signed up for EZ Checking, which is supposed to be free. Well it turns out that it also didn’t sit well with the New York State attorney general because on February 1st they reached a settlement with Citi. Anyone who opened an EZ Checking account, in any state, between Jan. 1 and Nov. 5, 2009 would not be subject to any of the new fees until Jan. 31, 2011.

What if you’re one of the million customers getting a one year reprieve? Now might be a time to map out your approach to changing your bank. There are plenty of free checking accounts without $1,500 balance requirements and it should be trivial for you to change.

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If you were to build your personal finances from the ground up, the checking account would be the first “product” you’d pick. If you’ve ever drawn your financial network map, you’ll remember that the checking account is the spoke in your primarily hub-and-spoke layout. Your paycheck is deposited into your checking account, your savings accounts are linked to your checking account, and when it’s time to pay credit cards or the mortgage, chances are the money comes from your checking account.

So if you were to rebuild your personal finances or build it from scratch, the first step is finding a checking account that fits your needs. For me, I need a checking account to be free, have plenty of ATMs, and no minimum balance. If your bank doesn’t offer that as a minimum, I’d find one that does.

So how do you find the best free checking account?

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The Move Your Money campaign peaked a few weeks ago but in our household we still haven’t yet made the change from a large bank to a local community bank or credit union. Part of the reason is inertia, the center spoke in our financial network map if our Bank of America account, but we’re working on it!

As I was doing some research for some unrelated projects, I discovered a useful resource at the FDIC. I’m always a fan of mostly useless trivia (this certainly falls in that category) so I was delighted to find a list of the largest banks in the United States. The FDIC captures all of this data for FDIC insured institutions, which is great, but it’s only updated annually, so this data is from June 30, 2009.

I bet you can name most of the banks on this list but I’d be surprised if you could name them all.

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How much money do you have sitting in a savings account? $500? $1,000?

Do you have plans for that money? If not, it should be in a certificate of deposit at your bank. If your bank doesn’t offer good CD rates, then you should open a CD with an online bank and take advantage of their better interest rates. If you don’t think you have enough money, you’re wrong. You can open a CD at an online bank with a single dollar.

One dollar.

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(Updated 11/6) I’ve been keeping a list of the best CD rates for certificates of deposit in the 12-month to 18-month maturity range, figuring that’s typically the sweet spot for CD rates. If the CD maturity is too short, banks won’t give you a good rate because it’s such a short period of time. If the CD maturity is too long, the customer is taking on a lot more inflation risk than the bank is probably paying out for. However, short term certificates of deposit still have their place:

• You’re setting up a CD ladder and you need CDs to fill up those short period slots.
• You have funds in an account that currently isn’t earning the highest yield for savings, transferring the funds will take time and cut down on your interest earned… so you might as well throw it into a short term CD to get a better rate.
• You simply don’t want to rate chase and open up a new account with each new online bank that offers a high rate, so you might as well hit up a short term rate with the bank you’re worth just to get a little extra.

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If you’re looking for the best CD rates, you’ve come to the right place. Below is a list of the nationally available best CD rates, updated every single day. I looked at the best rates available for CDs of less than 18 months and listed the ones with the highest rate. Typically the longer the term, the higher the rate, but for many online banks the best rates were for periods of shorter than 18 months. For simplicity’s sake, I put the cutoff at 18 months (some banks offer higher rates for longer terms). If you want shorter term CD rates, I have also compiled a list of highest short-term CD rates (less than 12 month maturities).

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