Add another name to the list of big banks adding fees to their checking account structures in an attempt to make up for falling profits.
In an announcement late last week, Citigroup unveiled plans to begin charging account holders a $10 monthly fee unless they can meet certain terms. The change goes into effect in December -- just in time for the holidays.
Customers can avoid the fee if they can hop over one of the following hurdles:
- Complete one direct deposit and one online bill payment each month or
- Maintain a combined minimum balance of $1,500 in checking and savings accounts.
Citi's current terms are a bit more lenient. There are no possible balance requirements; customers simply must complete five monthly transactions in order to avoid a monthly service fee of $8.
While I'm sure Citibank's changes will add to the consumer uproar over increasing bank fees, this change doesn't feel extraordinary to me. These terms seem fairly easy to meet. Most employers can conveniently arrange direct deposit, and paying bills online actually eliminates the hassle of writing and mailing checks. In fact, I'm guessing a lot of the bank's account holders are already meeting some of these terms.
Additionally, when you compare Citibank to some of its other "Too Big to Fail" counterparts, some of what the bank didn't add is especially crucial. The bank will not charge for debit card use, which certainly distinguishes the institution from the path other big banks are taking. Chase and Wells Fargo have both been gauging consumer reactions as they test debit card fees.
What do you think about these new changes? If you are a Citibank account holder, will you consider searching for a new place to stash your cash? Or do these changes seem appropriate based upon the evolving banking industry?