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Citibank charges for low balance

By David McMillin ·
Sunday, September 25, 2011
Posted: 9 am ET

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?

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November 01, 2011 at 8:11 am

Why is it that banks make it IMPOSSIBLE for middle class and poorer people to TRY to save a few dollars. A lot of people can only save slowly for a small measure of security from a savings account. Banks make it IMPOSSIBLE for those just starting out in life.Banks make it IMPOSSIBLE for kids to even learn how to save. Folks who do manage to put a few hundred dollars into savings are then cheated out of their money by bank fees if they cannot afford to add to their meager savings. WHAT A SHAME!!!!!

David McMillin
October 05, 2011 at 10:03 am

Thanks for reading, Amy. According to the press release from Citi last month, you can avoid the fee with a combined balance of $1,500 in your checking and savings accounts. They've also begun sending notices to current customers.

Amy reinstein
October 05, 2011 at 9:54 am

In reading the various online articles regarding citibank, I've seen mixed reports. Some say the balance maintenance is $1,500 and others say $15,000. Is it both for different accounts? I think either way, I would find a way to stay with Citibank as they definitely seem like the best option. But of course, I will first go in and speak with them first!