End of free checking?

[mickeyd]

And here I always thought that free checking was my God-given right!

Bank of America is planning to get rid of its basic free-checking account, this morning's WSJ reports. Other banks may follow suit.
It costs banks a few hundred bucks a year to maintain a customer's checking account. Banks have been able to make that up (and more) largely by charging overdraft fees.
But new federal rules mean banks can only charge those fees to customers who sign up for overdraft protection.

The End Of Free Checking : NPR

 

[HFWR]

Mine is "free", as long as I keep a min balance of $500...

 

[WhoDaresWins]

I read the article in the WSJ. Mine is currently free with free check reorders at regional mega-bank. I think I was also offered a gratis safety deposit box years ago, but I turned it down. I do have access to a credit union and could check that out for an account if mega-bank goes to a fee. Or, bite the bullet at long last and do my bill paying online and save stamps.

 

[FIREd]

Mine (at USAA) is still free, with no minimum balance.

I also have a free checking account at Wachovia, but since they have been taken over by Wells Fargo, things have been getting more expensive. I have had a free overdraft line of credit with Wachovia for 12 years (never used it) and last month, out of the blue, I received a bill from Wells Fargo asking me to pay some kind of outrageous annual fee to keep the line of credit open. I told them to stick it where the sun doesn't shine. If they start charging me for the checking account, I will shut it down too.

 

[WhoDaresWins]

Forgot USAA. I am a member there also so I guess I could do my checking through them. The thing is, I walk across the street from my office at lunchtime to my current bank, and I chat with the tellers and know them on a first name basis. I would hate for everything I do to be electronic.

 

[ronocnikral]

credit unions are the way to go. free and no minimum balance.

and here i thought i was a fool for turning down the overdraft protection. I thought it sounded shady when they were offering it to me...

i cleansed myself of wellsfargo a year and half ago. ended a 10 year relationship.

 

[jebmke]

Been thinking of dumping BofA and moving checking to USAA but keep a CD or MM account at one of our local banks along with safe deposit box.

 

[Bestwifeever]

It costs banks a few hundred bucks a year to maintain a customer's checking account. Banks have been able to make that up (and more) largely by charging overdraft fees.

It's hard for me to believe my checking account costs a bank a few hundred bucks a year to maintain.

 

[CuppaJoe]

My Union Bank checking account is free as long as I remain over age 50.

 

[Nords]

And here I always thought that free checking was my God-given right!

credit unions are the way to go. free and no minimum balance.

Every relationship I've had with a bank, however brief, has driven me back to credit unions...

 

[scrabbler1]

I am not looking forward to this although I don't know how badly I will be affected.

I am in BofA's free checking (no interest even though it would be pennies) account which requires $750 to avoid monthly fees. I usually keep at least $1,500 in the account which acts as a hub for my electronic dividend payments into it as well as my electronic payments out of the account and some ATM cash withdrawals. I write a few checks per month and make an in-person deposit per month, using that visit to sometimes get quarters for the laundry.

So, is BofA going to charge me for this or raise the minimum balance to a much higher level (like their other less desirable checking accounts) or require me to utilize more of their banking "services" with them, ones I have no real intereest in (no pun intended)?

Sounds like a bunch of lousy choices will be coming my way next year or sooner. Isn't their use of at least $750 per month (for me, twice that) without paying out interest enough of a profit for them? They don't even return my paper checks to me any more, just teeny-weeny images of them LOL!

 

[CuppaJoe]

There's gotta be a better way to get laundry quarters.

 

[scrabbler1]

There's gotta be a better way to get laundry quarters.

Actually, I have not needed the bank to get quarters the last few months. A elderly friend of mine has been winning a lot of quarters at Mah Jong or some other card game so she exchanges her winnings for dollars when I see her on our dance night.

 

[Gone4Good]

My WaMu checking account was advertised as "Free Checking, Free Everything, for Life" with no minimum balance requirements . . . In retrospect I guess "for life" referred to their life, not mine. But so far Chase is honoring the original agreement and just sent me a new box of checks for free.

My BOA account is "free" with a $750 deposit. But if you want paper checks you have to pay for them.

 

[Gone4Good]

Isn't their use of at least $750 per month (for me, twice that) without paying out interest enough of a profit for them?

According to the article each account costs $250-$300 per year to maintain (a number that seems ridiculously high). Even if the bank were able to make 400bp on your overnight deposits, it would take an average balance of nearly $7,000 to cover their expense.

 

[scrabbler1]

According to the article each account costs $250-$300 per year to maintain (a number that seems ridiculously high). Even if the bank were able to make 400bp on your overnight deposits, it would take an average balance of nearly $7,000 to cover their expense.

I saw that ridiculously high figure, too. I would like to see a breakdown of that figure. For a big bank like that with large economies of scale, how much of that is going towards the salaries of the bank's staff, the bigwigs (waaaay too much, of course!), maintaining ATMs and the physical upkeep of the banks themselves, processing and mailing out the monthly statements (for those of us who still receive them that way), and the electronic maintenance of the accountholders?

 

[FUEGO]

I bank with my local credit union. $1 a month in fees. That is almost always offset by the interest I get on the account from the float even though I strive to keep a balance of around $100 in it. Checks, which I have ordered exactly 2 times in my life, are $5 for 200. All of this is a price I'm willing to pay.

I really doubt the "hundreds of dollars per year" statement in the article. And I'm sure some banks will continue to do some form of free checking just to get your business, and hope they can sell you other stuff, get more deposits, get you a credit card, mortgage, HELOC, maybe sell you some loaded mutual funds or an annuity or whole life insurance.

Keybank is paying YOU an ipod touch for signing up for a free checking account. Will these type of promotions change? Probably not.

 

[Delawaredave5]

Banks suck. If these fees and/or complicated minimum funding requirements come out, I'll move my "daily banking" to Fido or Vanguard.

Only reason I haven't done that yet is my kids have accounts and it is convenient to have all these at one bank.

The country needs someone like Walmart to get into banking and wring out the pathetic excesses in the system. My understanding is they tried to get into banking in US - but regulations stop them.

Interesting recent article about "Banco Walmart" in Mexico...
Wal-Mart's Mexico bank aims at first-time savers | Reuters

 

[Tesaje]

Credit unions here. Free checking. Free online bill pay. & I get a limted number of free checks. I also get an automatic transfer from my shares to checking in the case of insufficient funds. Costs me 50 cents so I try to avoid that. Better than expensive overdrafts. I can't see any reason to use acommercial bank.

 

[Texas Proud]

It's hard for me to believe my checking account costs a bank a few hundred bucks a year to maintain.

Not reading the article... so I don't know what they included... but I can see it costing that much for a megabank... do you know how much that branch cost to build? Do you know how much it costs to maintain? Including staff? And megabanks have thousands...


Not saying that they could not get rid of all that.... but it is a cost of maintaining your account...

 

[Texas Proud]

My WaMu checking account was advertised as "Free Checking, Free Everything, for Life" with no minimum balance requirements . . . In retrospect I guess "for life" referred to their life, not mine. But so far Chase is honoring the original agreement and just sent me a new box of checks for free.

My BOA account is "free" with a $750 deposit. But if you want paper checks you have to pay for them.

LOL... I have to agree... one of my first checking accounts back in the late 70s was with a bank that had offered the FREE everything for life... they went under and was bought by some other small bank... when I said this to someone... their response was 'Well, they are dead'... It got me mad at the time, but now that you reminded me of it... it is funny...

 

[easysurfer]

I remember back in college I had a bank on campus that had a minimum balance of $500 which was a lot of money to keep in the bank for a college kid. Luckily, I had my bicycle so I peddled to a savings and loan that had great customer service and either a minimum balance of $50 or none at all (I forget, exactly). My first lesson in that not all banks are the same.

 

[easysurfer]

LOL... I have to agree... one of my first checking accounts back in the late 70s was with a bank that had offered the FREE everything for life... they went under and was bought by some other small bank... when I said this to someone... their response was 'Well, they are dead'... It got me mad at the time, but now that you reminded me of it... it is funny...

Free for Life. Not a bank, but I remember when the internet subscriptions were just starting, I signed up for one that offered lifetime service for a $250 one time charge. Ends up, the company went belly up in about a year after I signed up, but the cost was pretty much a wash had I signed up with AOL's monthly rate at the time.

 

[DeborahB]

I get free checking at a large local commercial bank - because I'm over 50. Free checks, too, and a free small safe deposit box (or a discount on a larger one). I get paper statements - I just can't deal with everything being online. I have had nothing but grief with BoA in various ways. Good luck to them - maybe they just want out of the checking account business totally.

The bank I use is one of the best rated in the country.

I pay most of my bills online in various ways and maybe write 5 checks a month - more in the summer when we pay someone to cut the lawn. Not a big deal.

 

[Amethyst]

Can somebody please 'splain to me why anybody uses a bank?
-2 credit unions
-I haven't paid a bank fee since 1981!
-Free overdraft protection
-Subsidized HEL's - no closing costs or appraisal fees
-Free on-line bill-pay service
-Free paper checks (I have to write those for property tax and estimated tax payments)
-Free ATMs (CU charges $.75 if you use another bank's ATM to make a withdrawal from their account)
-Fee-free credit card, that has cash-back rebates on gas and groceries

Amethyst