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Entries in Checking Accounts (6)

Friday
Jun082012

Top Three Tips for Checking Fee Safety

Hemera/Thinkstock(NEW YORK) -- If you have a checking account with a bank or credit union, do you know what the policies are on fees and overdrafts?

Probably not.

“Consumers are expected to wade through long, confusing documents and may be subject to steep, unexpected fees to access their own checking accounts,” said Susan Weinstock, director of the Pew Safe Checking in the Electronic Age Project.

“Our latest research shows that the median length of disclosures for a checking account is 69 pages long,” she added.

The forms are full of fine print and hard-to-read legalese, causing many people to disregard them.

“We asked people so what do you do with those papers that the bank gave you when you opened a checking account, and they said we put it in a drawer and filed it away,” Weinstock said.  “Nobody read these things.”

A new report called “Still Risky: An Update on the Safety and Transparency of Checking Accounts” finds some fees have increased, and that there’s been little improvement on disclosures to consumers since the last report in 2010.

Pew found that policies and fee information are not summarized in a uniform, concise and easy-to-understand format.

“What we found is that consumers really need a disclosure box,” Weinstock told ABC News.  “What we are pushing is like a nutrition label.”  

This would make it much easier for consumers to compare their banks’ checking and overdraft policies with other firms.

“You’d be able to look at accounts beyond banks and within banks, and decide this is the account that best meets my needs based on the terms the conditions and fees that suit you,” Weinstock said.

“Seven banks have adopted the box,” she said.  “Two of the biggest are Chase and TD Bank and we’ve had two of the three biggest credit unions -- Pentagon Federal and North Carolina State Employees Credit Union.”

Here are ABC News’ checking tips for consumers:

1. Learn what checking fees your bank charges by doing some research.


Pew measured the transparency of the 12 biggest U.S. banks by deposit volume and found that some checking information was not disclosed in writing by banks or on their websites.  For example, information about extended overdraft penalty fees were not obtainable  from Wells Fargo, Citibank, HSBC Bank, Regions Bank and Capital One.

2. Beware of transaction reordering.


Many banks reserve the right to change their posting order at their discretion, posting withdrawals before deposits in customer accounts and thereby increasing the likelihood of greater overdraft charges.  However, four banks in Pew’s report -- BB&T, Chase, Citibank and Wells Fargo -- disclosed that they post either chronologically or in low-to-high order for at least some types of debits.

3. Know that protective regulation may be coming, but it’s not here yet.

The Consumer Financial Protection Bureau opened a request for information on banks’ overdraft practices in February 2012.  Weinstock said Pew is planning to submit its checking safety report this month before the Consumer Financial Protection Bureau stops receiving comments from the public by the end of this month.

Copyright 2012 ABC News Radio

Thursday
Mar012012

Checking Fees at the 10 Largest Banks

Scott Eells/Bloomberg via Getty Images(NEW YORK) -- Is free checking going to be a thing of the past? Since the beginning of last year Bank of America has been testing different options for new customers who open checking accounts in Arizona, Georgia and Massachusetts.

Branches in those states are now experimenting with monthly fees of $6 to $9 for an “Essentials” account, according to The Wall Street Journal.

There are other account charges in those states that range from $9 to $25, the paper reported, but customers have the ability to get the charges waived if they use a credit card, take a mortgage with the bank or meet minimum balance requirements.

Bank of America says it continues to learn from its tests and has not made any decisions about whether to change fees on new accounts more widely.

ABC News has compiled a list of the 10 largest banks and how much each is charging for basic checking accounts and the debit cards that accompany them.

1. Bank of America

Checking: $25 deposit to open; $8.95 monthly fee unless statements are paperless and deposits/withdrawals are done online or by ATM.

Debit Card: Included with all checking accounts (no additional fees).

2. Wells Fargo

Checking: $100 deposit to open; $5 monthly fee unless direct deposit or average balance of $1,500.

Debit Card: Included with all checking accounts (no additional fees).

3. JPMorgan Chase

Checking: $25 deposit to open; $12 monthly fee unless direct deposit of at least $500, minimum balance of $1,500 or $5,000 average daily balance in linked accounts.

Debit Card: Included with all checking accounts (no additional fees).

4. Citigroup

Checking: $0 to open; $10 monthly fee unless balance of at least $1,500 in prior month or one direct deposit and one bill payment each month.

Debit Card: Included with all checking accounts (no additional fees).

5. US Bank

Checking: $50 to open; $6.95 monthly fee with online statements or $8.95 with paper statements unless direct deposits of at least $500 or average account balance of $1,500.

Debit Card: Included with all checking accounts (no additional fees).

6. PNC

Checking: $25 to open; no monthly fee.

Debit Card: Included with all checking accounts (no additional fees).

7. TD Bank

Checking: $0 to open; $2.99 monthly fee with online statements or $3.99 monthly fee with paper statements.

Debit Card: Included with all checking accounts (no additional fees).

8. Capital One

Checking: $50 to open; $8.95 monthly fee unless $300 minimum daily balance or monthly direct deposit of at least $250.

Debit Card: Included with all checking accounts (no additional fees).

9. SunTrust

Checking: $100 to open; $7 monthly fee unless minimum balance of $500 or direct deposit.

Debit Card: Included with all checking accounts (no additional fees).

10. BB&T

Checking: $50 to open; $10 monthly fee unless direct deposit of at least $100, $1,500 average balance or a mortgage with BB&T.

Debit Card: Included with all checking accounts (no additional fees).

Copyright 2012 ABC News Radio

Thursday
Mar012012

Bank of America to Implement Monthly Fee on Checking Accounts?

Jin Lee/Bloomberg via Getty Images(NEW YORK) -- Despite an uproar over proposed debit card fees last September, Bank of America is testing new charges for many consumers as it tries to cut costs.

The Wall Street Journal reports the changes would require people with some checking accounts to pay a monthly fee of $6 to $9.  Customers could avoid the penalties if they agree to bank online or purchase other banking products, such as mortgage loans or credit cards.  The new charges are being tested in Arizona, Massachusetts and Georgia.

Thursday morning, Bank of America responded to the report, saying: "We have made no decisions on the construct of new product offerings as the tests are still ongoing.  When we do finalize our plans, we will communicate with our customers.  All our current and future offerings have ways to avoid fees."

The company said they have been experimenting with new solutions for over a year and that it was nothing new.

The proposed move comes as banks continue to lose money on basic checking.  Many have already eliminated free checking accounts.

Copyright 2011 ABC News Radio

Tuesday
Oct042011

Checking Fees at the 10 Largest Banks

Goodshoot/Thinkstock(NEW YORK) -- Banks are looking to increase revenue by charging for debit cards and basic checking accounts in reaction to the Durbin Amendment of the Dodd-Frank Act. The amendment, which took effect Saturday, limits the fees banks collect from merchants when customers make debit card purchases.

ABC News has compiled a list of the 10 largest banks and how much each is charging for basic checking accounts and the debit cards that accompany them.

1. Bank of America

-- Checking: $25 deposit to open; $8.95 monthly fee unless statements are paperless and deposits/withdrawals are done online or by ATM.
-- Debit Card: Included with all checking accounts (no additional fees); $5 debit fee to be rolled out in early 2012, which can be waived under certain circumstances.

2. Wells Fargo

-- Checking: $100 deposit to open; $5 monthly fee unless direct deposit or average balance of $1,500.
-- Debit Card: Included with all checking accounts (no additional fees); test marketing $3 debit fee in five Western states, possible national rollout.

3. JPMorgan Chase

-- Checking: $25 deposit to open; $12 monthly fee unless direct deposit of at least $500, minimum balance of $1,500 or $5,000 average daily balance in linked accounts.
-- Debit Card: Included with all checking accounts (no additional fees); test marketing $3 debit fee in Georgia and Wisconsin, possible national rollout.

4. Citigroup

-- Checking: $0 to open; $8 monthly fee, waived if account has two of the following: direct deposit, online bill payments, ATM withdrawal, debit card purchase.
-- Debit Card: Included with all checking accounts (no additional fees).

5. US Bank

-- Checking: $50 to open; $6.95 monthly fee with online statements or $8.95 with paper statements unless direct deposits of at least $500 or average account balance of $1,500.

-- Debit Card: Included with all checking accounts (no additional fees).

6. PNC

-- Checking: $25 to open; no monthly fee.
-- Debit Card: Included with all checking accounts (no additional fees).

7. TD Bank

-- Checking: $0 to open; $2.99 monthly fee with online statements or $3.99 monthly fee with paper statements.
-- Debit Card: Included with all checking accounts (no additional fees).

8. Capital One

-- Checking: $50 to open; $8.95 monthly fee unless $300 minimum daily balance or monthly direct deposit of at least $250.
-- Debit Card: Included with all checking accounts (no additional fees).

9. SunTrust

-- Checking: $100 to open; $7 monthly fee unless minimum balance of $500 or direct deposit.
-- Debit Card: $5 monthly fee for unlimited debit card usage.

10. BB&T

-- Checking: $50 to open; $10 monthly fee unless direct deposit, $1,500 average balance or a mortgage with BB&T.
-- Debit Card: Included with all checking accounts (no additional fees).

Copyright 2011 ABC News Radio

Monday
Oct032011

Tips and Tricks for Avoiding New Bank Fees

Goodshoot/Thinkstock(NEW YORK) -- Many banks are inventing brand new fees to stick you with -- and raising the ones they dreamt up years ago.  Fortunately, there are workarounds to avoid these costly "gotchas."

When Congress and the Federal Reserve passed new laws and rules that rob banks of some of their favorite fees, the industry came up with some new ones.

Americans now use debit cards more than credit cards, and next year, the use of plastic could even surpass cash. And that, experts say, is why banks are now looking to cash in on your debit cards.

Here are some tips on how to avoid these new bank fees:

Gotcha No. 1: No more free debit cards.

Bank of America is about to start charging a $5 per month debit card fee.  Use your card just once, to buy something like a $1 bottle of water, and you'll owe it.  A Bank of America spokesperson says "the economics of offering a debit card have changed with recent regulations."

Wells Fargo and Chase have experimented with similar fees.

The workaround: Use a credit card instead of a debit card, as long as you pay it off each month.

Gotcha No. 2: No more free checking.

Two years ago, three-quarters of banks offered it.  Now, fewer than half of banks do, according to bankrate.com.

The workaround: Nearly all banks will give you free checking if you sign up for additional services, such as direct deposit.

Gotcha No. 3: Mandatory minimum balances.

Several big banks now charge between $5 and $15 if your checking balance slips below $1,500.

The workaround: Keep all your accounts at a single bank, so both checking and savings count towards your minimum.

Gotcha No. 4: Ever-higher ATM fees.


You'll now pay a total of $3.81, on average, for using an out-of-network cash machine.

The workaround: Consider an online bank because many of them reimburse you for ATM fees.

Gotcha No. 5: Soaring bounced check fees.

They now average nearly $31.

The workaround: Finance experts say consider joining a non-profit credit union that doesn't use fees to boost its bottom line. Credit unions are a tremendous resource and these days there's always some way to join, even if you don't work for a company that offers one.

Copyright 2011 ABC News Radio

Monday
Sep192011

Free and Almost-Free Checking Options

Ryan McVay/Photodisc/Thinkstock(NEW YORK) -- Citibank announced it is repackaging its checking options for consumers, raising its monthly checking account fee to $10 from $8, unless you have a minimum of $1,500 or monthly online billing and a direct deposit.

The bank will notify customers at the end of the month, and it's effective for all clients in December.

According to research firm Moebs Services, almost two-thirds of big banks have eliminated free checking since the end of 2009, adding fees or changing terms of about 4 million consumer deposit accounts, reported the American Banker.

Bentley Rubinstein, business development manager at Mint.com, said there are at least four things to consider when choosing a checking account.

1. Account maintenance fees: Make sure to check to see if the account charges a monthly maintenance fee or a fee when your balance falls below a certain threshold.

2. Be aware of the checking account’s ATM fee policies. There are often two fees charged for ATM transactions: one by your bank and one by the ATM machine. Look for an account that doesn’t charge you an ATM fee and then reimburses the one charged by the ATM.

3. Earning interest. While this is now a rarity, you might look for a checking account that bears interest. Typically you’ll find this with “Internet” checking accounts that don’t have significant physical presences in terms of ATMs and branches.

4.  Smaller banks/credit unions: Some people may still want the ability to walk into their local branch any time. For them, it may be best to look at smaller banks or credit unions in the area that don’t charge account maintenance fees and offer ATM fee reimbursements.

Rubinstein said Ally Bank & Schwab Bank both offer “Internet” checking accounts that earn interest, don’t charge ATM fees, and reimburse ATM fees charged by other banks’ ATMs. Schwab reimburses ATM fees assessed by banks overseas when traveling abroad. ING Direct offers an “Internet” checking account that earns interest and has a network of over 35,000 ATMs where customers can withdraw money without a fee.

Here are what some national banks offer:

1.       Citi:

For its Basic Checking package, Citibank offers three options:

-          Clients pay no monthly service fee if they make one direct deposit and one online bill payment during each monthly statement period.

-          Clients can also avoid a monthly service fee by maintaining $1,500 in combined average monthly balances in their Basic Checking and linked Basic Savings accounts.

-          Clients can choose to pay a flat $10 monthly service fee for the Basic Banking package, which the bank says includes more standard features and services than competitor offerings.

For its full-service and premium checking packages, customers can either choose to maintain “a minimum relationship balance level that recognizes all their savings, borrowing, and investing activities,” or they can pay a “competitive monthly service fee.”

With all the options, Citibank does not charge additional fees for debit card usage or online bill payments.

Citibank said it made “the hard decision” to stop giving reward points for debit card transactions, it is keeping its ThankYou banking relationship rewards program, and will increase the maximum rewards earning opportunity for all clients.

 2.      Chase:

A spokesman for Chase said the bank offers customers in most markets several choices of checking accounts and ways to avoid a monthly fee in all of them.

For example, Chase Total Checking customers can avoid the monthly fee by having at least $500 in direct deposits each month, keeping a minimum of $1,500 in the checking account, or keeping a minimum of $5,000 combined in all deposit and investment accounts at Chase.

3.      Bank of America:

-          Bank of America’s e-Banking, for consumers who prefer to bank on the go, has no monthly service charge and no minimum balance requirement when customers choose online paperless statements and make deposits and withdrawals online or at the ATM.

-          MyAccess checking customers can avoid the fee with a $250 monthly direct deposit.

4.      Wells Fargo:

- Wells Fargo offers Value Checking which has a $5 monthly service fee that can be waived by maintaining an average daily balance or direct deposit. There can be a minimum opening deposit of $100.

- College students can open a CollegeCombo account which has a minimum opening deposit of $125.

Rubinstein said you can use Mint.com’s Ways to Save feature to find a checking account for each individual based on spending patterns.

Copyright 2011 ABC News Radio







ABC News Radio