MoneyRates Blog
Are New Savings Account Fees Driving You to Change?
By Richard Barrington | Money-Rates Columnist
Besides locking in interest rates, one potential advantage that certificates of deposits have over savings accounts is that they should not be subject to sudden fee increases. Looking to shore up profitability, banks have been raising a variety of fees lately. In turn, rising fees have increasingly been cited as the reason why customers switch accounts.
While checking accounts seem to have borne the brunt of this, other deposit accounts have not been immune to rising fees. There are a couple things going on here. First, the banks are trying to increase revenue wherever they can, and those extra fees help make up on lost revenue from lending. Second, in the ways they structure fees banks are trying to focus on the most profitable customers — those that have the largest balances, make the fewest transactions, and bank electronically.
This is somewhat akin to the extra charges airlines are resorting to — some of it is understandable, but when they go to far the nickle-and-dime mentality just drives customers away.
At MoneyRates, we are interested in the fee experiences of our site’s visitors. What are some of the worst or best deals you’ve come across? While visitors to our site tend to be rate fanatics looking for the best interest rate deals, they are also smart enough to know that unfavorable fees can undermine those interest rates. We’re interested in your comments on your experiences with bank fees.
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2 Comments »
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July 29, 2009
Bob says:
Watch out for any bank that suddently changes and raises their minimum balance requirement to tack on an extra monthly fee.Without first informing the depositors…either by US Mail, Email, or a notice in their customer account Inbox! The bank had a minimum balance of $1500, then raised it to $5000. without any of the above approved notices, (WHICH SHOULD BE AN FDIC REQUIREMENT), before tavking on an $8.95 monthly service fee.
Not many people check their saving accounts daily on the net, when once a month should be sufficient to check and record their monthly interest, etc.., That is, unless you have a lot of transactions that month and you want to make sure the debits and credits are recorded correctly.
I did get this wrongly charged fee recredited to my acoount, and a chance to increase my minimum balance or close out the account. But just think of thousands, or even millions, that don’t check their accounts often, and how that can add up to big money for their Christmas Party, even though you weren’t invited, You can do the math. But their are still those that have a false sense of security, that
have been lead to falsely believe that the banks can do no wrong, since the FDIC is the watchdog for the people, that makes sure that both depositors and borrowers are always treated fairly.The point is; The Saying, “Buyer Beware,” appears to also now mean, “savors Beware”
Do have a good day!
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July 29, 2009
Richard Barrington says:
Good point, Bob. Monitoring your account online or via statements is the most foolproof way of protecting against unexpected fees, because even when banks do disclose new policies, the disclosures can be hard for the average person to decipher.
