As reported in the New York Post, Citibank plans to eliminate the two fee waivers that had been available on its two basic checking accounts nationwide early next year.
Previously, customers who had an "EZ" or "Access" checking account and didn't keep a minimum balance of $1,500 could avoid paying $7.50 or $3 per month, respectively, by arranging a monthly direct deposit or using the account to auto-pay two monthly bills.
Beginning in February, those fee waivers are being eliminated, so the only way a person who has one of these accounts can avoid the fee is to keep $1,500 or more with Citibank. Now, that $1,500 doesn't all have to be in that checking account; it can be in another Citi account or a CD, but it needs to add up to $1,500 if you don't want to pay the fee.
A spokesperson for Citi told Walletpop about another Citi checking account that has no minimum balance -- but that one also comes with a $3 monthly fee. Currently, once the new eliminations of the fee waivers kick in, Citi won't have any no-fee, no-minimum-balance checking accounts.
The Citi spokesperson told Walletpop that this change was expected to affect only a "relatively small" number of the bank's account holders but did not further elaborate as to the number of customers who will have to pay the fee come February. A Citi bank manager interviewed by the New York Post, though, admitted that working-class customers who don't have a $1,500 cushion will be hard-hit by the fees -- which could total up to $90 annually -- and might pull up stakes and switch banks.
As the New York Post article also points out, if enough customers switch their banking out of Citi, the company could rethink their fee policy; however, if people either save up enough for the minimum or just pay the fee every month, it could send a strong signal to other banks that customers are willing to pay for their checking accounts.
"Citibank's balance requirements and monthly service fees are among the lowest in the industry for similar packages," the spokesperson said, part of a statement about the changes sent via email. However, a quick check of some other big banks' websites turn up better offers.
For instance, Bank of America's "My Access" checking account has no minimum balance requirement and charges no monthly fee if the account is opened online. Chase's "Chase Checking" account has no minimum balance requirement and no monthly fee if the user has direct deposit or if they use their debit card five times per month (otherwise, it's $6 a month). Wells Fargo's "Basic Checking" account waives the $5 monthly fee if a customer keeps $1,000 in the account or if they have direct deposit.
Readers, what do you think? How does Citi's new deal stack up?
Take the first steps to building your portfolio.View Course »