Wells Fargo Ends Free Checking
The tide of new bank fees keeps on rising.
Wells Fargo is rolling out a new monthly $7 fee that will be charged on the bank's Essential Checking accounts, according to reports from CNN Money and the Associated Press. This effectively marks an end to free checking at the bank.
Starting in 2010, new customers could not get free checking accounts at the bank but existing customers were grandfathered into their free accounts. Last year, the bank started moving some of those customers into fee-based checking accounts. Now customers in six more states will lose their free checking accounts. The bank did not identify in which six states the new fee will be applied, but CNN Money reported that New York is one of them.
For customers who maintain a $1,500 balance on a daily basis or by making a direct deposit of $500 or more each month, that $7 will be waived. The new fee will go into effect on May 4 and will be reflected on June statements, according to CNN Money.
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Bank of America is also testing new fees. The nation's second largest bank said last week it was feeling out a menu of new fees in several states, including Arizona, Georgia and Massachusetts. The bank is trying out a similar fee to Wells Fargo, charging $6 to $9 for its own "Essentials" account, according to the Wall Street Journal. Customers can avoid the monthly fee by maintaining minimum balances, banking online or using more a greater number of other services with the bank.
There has been one winner in the bank-fee march: That is credit unions. Membership in the nonprofit financial institutions more than doubled between 2010 and 2011, according to figures released by the National Credit Union Administration last week. Assets at credit unions grew by more than 5 percent in 2011, for a total of $961.8 billion, according to figures from NCUA. Banks, by comparison, have more than $12 trillion in assets.