Checking Account Fees

Up until about two years ago banks were competing heavily for your business and almost all of them were offering free checking with no or almost no minimum balance requirement. After the financial crisis, when the government changed the rules, banks were made more responsible for their bad behavior. Gradually, banks instituted minimum balances and monthly fees (even if your account drops under the minimum balance for just one day). This was, at the very least, sharp business practice since many people opened these accounts because they carried no service charges.

Additionally, because of the Know Your Customer (KYC) regulations the government has placed on banks to stop money laundering, the amount of time it takes to open a checking account and have access to your money is often one month. This has discouraged many people from changing banks.

Most banks have taken the position of instituting fees even with existing customers. For example, Chase now requires a minimum balance of $1,500.00 or an average daily balance of $5,000.00 and Bank of America Requires a minimum balance of $1,500.00; otherwise they both charge a fee of $12.00 per month even for customers who opened accounts when there were no balance requirements and no fees.

It pays to shop around. If you want a full service bank then TD Bank has an account with no minimum balance and a $3.99 per month service charge. They offer seniors an account for no service charge if they maintain a balance of never less than $100.00. Capital One Bank has a minimum balance of $300.00 and Republic Bank has an average balance requirement of $500.00.

Savings and Loans often offer even better deals. For example, Astoria Federal Savings and Loan has no minimum balance requirement and no fees if you open a checking account with $100.00.

The above examples are based on New York Banks and may well be different in different states especially for local banks which are covered by State not Federal Law.

If you keep your money in a large national bank and you don’t keep large balances available in your account it could be costing you as much as $144.00 a year. Wouldn’t you rather have your money in your pocket than in the bank’s?

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