You Pay Me Interest, I Pay You Fees

Bank fees were in the news again a few weeks ago when Bank of America announced it will take a $10 billion charge for anticipated lower fee revenue as it abandoned overdraft fees from debit card transactions. Back in September New York Times personal finance columnist Ron Lieber wrote that maybe customers will be willing to pay monthly fees if the checking account comes with some innovative services customers want.

Ron was enamored with depositing checks by taking a picture of the check with a smartphone.

Many of us would gladly pay a few dollars a month for that feature alone from our own banks.

I believe him. Maybe he deposits many paper checks. I don’t. I checked my primary checking account. In the last three months, there were 54 transactions in and out of my checking account. Only three were paper check deposits: two from mail-in rebates, one from credit card cash back. Pay $5 a month for depositing one check a month? No way.

Another online banking pundit Jim Bruene at NetBanker gave this list of value-added services banks can provide for a fee:

  • Real-time mobile/desktop alerts
  • Lifetime data backup in the cloud
  • Linked OD [overdraft] protection
  • Instant bill pay with guaranteed delivery  
  • Remote deposit capture
  • No-hold customer service with guaranteed same-hour call back
  • Custom fraud tools with fraud-loss guarantee
  • Online financial management tools
  • Desktop/mobile apps fine-tuned for specific customer segments
  • Rewards program for self-service/estatements
  • Two-way alerts
  • Monthly credit score

I looked at the list and I’m not interested in any of them. Banks made a big mistake when they gave away online bill payments for free. That’s the service they can charge. It’s too late now.

What will it take for me to pay a bank monthly fees? If the bank pays me a good interest rate. Reward checking accounts have hoops that I’m not interested in jumping through — most notably the requirement for using the debit card 10 or 12 times a month. If I can pay $10 a month to have them waive those requirements, I would use a reward checking account. I consider it a fair trade with the bank: you pay me interest for borrowing my money; I pay you fees for your banking service.

Until that happens, I doubt many will pay a monthly fee for their checking account.

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  1. Beans says

    I am with you. I am not interested in any of the add-on services. The only service that is useful to me is free on-line bill pay. Maybe it won’t be free much longer?

    I still prefer paper statements, may be they will charge for paper statements. So instead getting customers to pay fees for extra services, they will make customers to pay for services that were free.

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