Surprise!: Bank Fees

I really don’t like being ripped off. Are you with me? That’s how I felt when I was online this weekend reviewing our checking and savings accounts and saw a charge that I’ve never seen before: $22.98 for ‘account maintenance’.

Funny. My husband and I opened that account—and several others—at the local branch of this behemoth for the juicy reason that we were assured that with four other accounts at that bank, as well as several credit cards between us, we would never be charged any monthly fees as long as the balance didn’t dip below a certain amount.

However, there it was in all its wallet-swiping glory: a monthly fee.

So I did what I advise you to do. I called my local bank branch (rather than customer service over the weekend—keeping it local keeps it personal and that much more likely to get fixed). Seems our account manager had left and a nice personal banker named Jason informed me that policies had changed since we’d opened the account, hence the fee.

Hmm. I tend to read my mail from top to bottom—and then some—and there was no alert about adding $275.76 to my annual expense budget. Jason’s answer, “Well, we apologize for that but if you’d just come in to meet with our business banker (it’s a business checking account) we can present you some new benefits on your accounts.” The only ‘benefit’ I wanted was my original account and all its perks back. To do that, Jason informed me that I’d have to come into the branch for what couldn’t be more than a “15 minute” meeting.

Sniff. I smell a salesman.

No thanks, Jason. Do you realize that I can just go to or and do a little comparison shopping from the comfort and convenience of my desk and get myself a whole new place to bank for all our accounts with little or no fees—surely not $22.98 a month!

Hidden fees and ‘surprise’ fees make up a chunk of the billions that banks make in fees every year. If you’re a good customer, carry a decent balance (meaning, at least $1,500+) and especially if you have a checking account earning no interest, you shouldn’t pay a monthly fee. If you are, shop elsewhere or do what I did and make that call.

I’m waiting for Anthony to get back to me about my waive-the-fee request but in the meantime, I hope he knows that I’m shopping around for a replacement bank like a Grandma shops for grandkids on Christmas Eve—fast and wise. Tune in tomorrow for the verdict.

>>Read Part II

In the meantime, what’s your worst banking-fee story? How’d you resolve it? Did you take your money and run or fight it out—or both? I want to know…

I have several credit cards that I use on a regular basis. I am lucky in that I don't HAVE to use them and only use them for expenses and always pay off the balance at the end of the billing period. I do make exceptions to this rule and take advantage of PROMOTIONAL OFFERS such as 0% interest loans. I was carrying a credit card balance at 1.99 % when the bank bill paying system sent the payment to the wrong payee. I was hit with a late fee by the credit company and they decided to raise my interest rate to 16%. When I explained the situation to customer service he was not sympathetic and was downright rude. I immediately paid off that account and have not used the card since. I did not cancel the account because I figure it does cost them something to carry it. I don't know what it costs for banks to acquire a new customer but from all of the offers I get I assume it is a major investment and the best punishment for them is to lose a customer. --Leo, AL

Posted on: 05 Jun 2008 12:30 P.M.

You need to find another bank. There are plenty of banks that don't charge fees and pay you interest on your checking too. Banks make money lending out your money to other people ... so don't let them make money on you. --Chuck, GA

Posted on: 04 Jun 2008 5:59 P.M.

Eric from MI is right! Credit unions are not-for-profit cooperatives, owned by their members. Historically they provide the competitive financial products at better rates and many services are free. --Kaye, TX

Posted on: 06 Jun 2008 5:59 A.M.

I am a 23-year-old recent grad, and I begin working in 2 weeks. I am single, don't have car payments, and will live at home for 4 months to save some money, so I really don't have a lot of expenses. On top of maxing out my 401(k) with work right away, I want to open a Roth IRA account, and try to max out contributions to that as well ($5000 in '08 I believe). There are the obvious advantages, but here are my concerns:

1. In order to fully realize the tax benefit, you need to hold onto it until retirement. That is really hard for me at 23 to visualize.

2. I can take out earnings from the account after 5 years penalty free towards the purchase of a new home, given I am a first time home buyer. This is nice, but honestly, I think it would make sense to just save that money because I would like to own a home before 5 years passes.

I think these are legitimate concerns. Even though a Roth IRA is truly tax free earnings, I'm not sure it is always the best, even for someone young in my situation with few expenses.

Any thoughts? Thanks! --Patrick, IN

Posted on: 04 Jun 2008 12:55 P.M.

Sounds like you want to save and invest but not for retirement. Roths are for retirement only, hence the penalties for early withdrawal and you're right about the loop for first-time homebuyers. But if you want to buy before the 5 year clock runs out you'll lose so much to penalties and taxes it's not worth it. Really, tax-friendly investments are reserved for long-term saving and investing only so if you want to save for a home to buy in the near future, stick to a 1-3 year CD with a fixed interest rate or a savings account that earns interest - shop for one at or --Carmen

Posted on: 04 Jun 2008 4:23 P.M.

Patrick: I congratulate you on wanting to save so much so fast, but I have some advice for you. 1) In maxing out your 401K, are you going over what the company matches? What are the benefits of that? Will all of your contributions be before tax? I would only contribute up to what the company matches. You get an automatic return on it and it's probably before tax. I wouldn't do more because I would feel that I could do better with investments elsewhere. 2) The ROTH is great. Put as much in as you can, but don't touch it until you retire. If you feel you can't do that, put your money elsewhere. I would recommend a money market account. 3) Speaking of that money market account. Open one up. You should put aside about 3 - 6 months salary in an emergency account. This is helpful if you lose your job or just have unexpected bills (car repair comes to mind). Good luck! --Kevin, VA

Posted on: 05 Jun 2008 1:20 P.M.

I'm sure the banks feel they have more leeway with charging unnaounced fees to business customers because people are willing to pay more fees as a business expense rather than a personal expense... and perhaps the person reviewing the accounts is not the same person who owns the business.

These fees can be avoided so there's no reason to pay more than you have to. --Flexo, NJ

Posted on: 04 Jun 2008 3:14 P.M.

[Flexo is the chief editor of the personal finance blog]

I'd like to take an opposing viewpoint regarding excellent Customer Service with a bank. The first time I saw a Service or Maintenance fee on my checking account I did make an appearance at the local branch. As a result, fees were waived not only this first time, but a simple phone call waived ongoing fees as well! Yes, I do keep a minimum of $1,500 in my account, with paltry interest, but you cannot beat great Customer Service from a local branch! (Being nice does help.) --Cheri, PA

Posted on: 04 Jun 2008 12:45 P.M.

Two words for you: Credit union. You know nothing in life is free. It's FEE for life. --Eric, MI

Posted on: 04 Jun 2008 10:13 A.M.

I had the same issue with maintenance fees at my bank. When I signed up for advantage checking for my business account I was told that I could get two checking accounts with no fees for two years. Suddenly, after two months I was being charged $17 on each checking account for maintenance fees. Due to not taking care of the issue immediately some of those fees are now not being credited back to me. I'm now informed that they can only take care of fees going back three months. At first they only took care of the fees on one account and told me that I had to go into the local bank that I had signed up for the accounts to get the other account credited back. I procrastinated on taking care of the problem and basically the bank got me for $102 on both accounts ... I would advise everyone to realize that these fees add up. Don't think about them on a monthly level. Look at the cost on a yearly basis. Be sure to take an active role in maintaining your banking relationship. --Andrae, FL

Posted on: 04 Jun 2008 7:18 A.M.