One way, or another...
The AP reports that banks nationwide are jacking up the fees that they charge account holders who bounce checks or who use another bank's ATM in a pinch. Meanwhile, the banks are also cutting the interest rates they pay (a third of a percent, on average, thank you very much) while increasing the minimium balance to qualify for interest whatsoever.
Does this signal a shift in the business model for banks, away from the golden days of the neighborhood "Savings and Loan", where the checking and savings accounts were just a way for the banks to create capital for the home mortgages on the other side? You gotta love a business model where you can make money from both your suppliers and the consumers of your product.This all seems to be working out pretty well for the big banks. Citigroup, for example, reports that in the third quarter, its net income from US consumers grew by 23%. Not bad.
The AP story is based on a survey by Bankrate.com.
Bankrate.com's advice: the savvy consumer will find a no-fee account with no minimum balance and then keep a bare minimum in it. The rest should be put in a money market account. But of course, that assumes that you can watch your account like a hawk. If not, and you make a slip, then you'll pay the bounced check fees.
Kinda makes you want to just keep your money under the mattress, eh?
I'm just about to close my Bank of America account. I've never bounced a check with them ever and they were the first and only checking account I had, yet they keep inventing new fees. It was opened as a no fee account years ago. Now I get charged if my account falls below $500 for even a second ($4), if I go into their bank more than once a month ($3 EACH additional time), and $5.50 if I call their automated phone line (without even talking to a person) more than something like 5 times a month. And those are just the fees I know about. I told them I was going to be closing my account, and the response was "every bank has fees". FALSE.
I've opened a new account elsewhere, that doesn't have fees, and Bank of America can kiss my ass. I did exactly as you recommend here; a savings account where my paycheck goes, and then a minimal amount in my checking for when I need to pay bills.
October 31, 2006 5:02 AM | Reply | Permalink