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I wonder what will happen if the credit unions start charging money, becoz believe it or not, in a world of evolving banking, nothing is going to be free forever, and that includes stone age institutions like credit unions too. At some point, they need to invent the wheel too and move forward.
And that's what is making me chuckle at this outrage.
If people think they can park their money for free in some place, they might as well dig a whole beside the dog kennel and put it in there, right? What is the need for a bank even?
traditional retail banking is:
1. customer deposits money
2. bank loans out a % of money and charges interest
3. bank makes profit on interest charged
you used to need to take 5 minutes of a teller's time each week to deposit a check, and maybe a couple other times to get cash. a transaction was quite expensive. now that transactions are cheap, banks look for new revenue to continue "growth".
Credit Unions are member organizations. Why would a credit union ever need to charge it's members more than the true cost of a transaction? a debit transaction is pennies. the rest is profit. banks are sad they don't have easy, hidden, profit stream so they are implementing a fee and hoping that most customers don't notice/don't react.
And if that was happening it would be disconcerting.
Singlelady seems to think that it is... but I am yet to see any evidence that customers with even modest deposits (above the minimums needed to avoid extra fees) are leaving in any substantial number; let alone the customers with actually substantial deposits and other business the Bank makes money with/for.
Anyway, I don't know what a reasonable allowance for costs associated with managing an account are but I'm sure it is far more than the $30 that $1500 on deposit @2% represents. That has to be made up somehow.
this is purely anectdotal, but all of my former colleagues and my friends in the NYC metro area that bank with BoA are closing their accounts. So, a few dozen people with accounts worth $10,000 at least, and in some cases well over $100,000, all young people...that's a bit disconcerting if you ask me.
like i said, I'm sure they've assumed some # of lost customers, but I think more people are fed up with these nickel-and-dime fees.
Don't worry, you'll always be able to park your money away for free. The fees will only be tacked onto account where the fixed costs & risks are greater than the revenue stream provided by account holder's deposits.
For accounts with small amounts of cash (a few grand or less), since the banks revenue stream is extremely small, it will not be possible to maintain those accounts without fees. They used to compensate for the cost with debit card transaction fees, but not anymore.
what costs are you referring to for maintaining an account with, say, a $4,000 average monthly balance?
But now the number/capacity of those check clearing centers is maybe 10% of what it used to be.
Which is just one of the reasons it takes longer to get deposited checks credited to your account.
btw.. what did the banks charge for processing those paper checks?
As the world moves on, the costs of doing business will shift...
but it doesn't go away.
I really hate to always be defending the Banks...
but a lot of folks need to get a grip on the underlying points.
the cost of a transaction is dramatically lower than when we used checks and tellers. yet banks want "growth". this is how they get "growth" when it's a mature industry.
Nah... The threshold is rather low. Regular savings/checking with as little as $1500 (maybe $3000?) and/or things like automatic deposit activity is plenty.
In the larger scheme of things...
if you don't have this sort level of "safety net" reserve balance you should be using cash and envelopes to manage your purchases like my grandmother not debit cards.
from what i've read, it was all accounts except for those premium accounts. i didn't read that you could do a $1,500 average monthly balance. either way, I don't need to bank with them. They have poor service to begin with, so this was just the last piece to motivate me to move on. I bank with citibank which has had great customer service, and the thresholds to avoid their maintenance fees have been easy to maintain (direct deposit + 2 billpays per month)
Right. I'm aware of a few such examples too. Just very few of them.
Quote:
I'm sure they've assumed some # of lost customers, but I think more people are fed up with these nickel-and-dime fees.
But that's the point. The "nickle and diming" that is going on here ...and which I also hate when similar gets applied to me... doesn't apply to me, nor I suspect to you, or anyone else with even the rather modest deposits needed to avoid the fees.
I suppose it's "noble" for these others to make that sort of symbolic act of solidarity with those affected... but I just don't expect that (once the dust has settled!) their number nor the deposits will amount to much.
Right. I'm aware of a few such examples too. Just very few of them.
But that's the point. The "nickle and diming" that is going on here ...and which I also hate when similar gets applied to me... doesn't apply to me, nor I suspect to you, or anyone else with even the rather modest deposits needed to avoid the fees.
I suppose it's "noble" for these others to make that sort of symbolic act of solidarity with those affected... but I just don't expect that (once the dust has settled!) their number nor the deposits will amount to much.
Time will tell.
we'll see. i still don't see it as a smart move by them. most people i know, even those with great incomes, do not keep a lot of money in a checking account (few accounts pay interest). so while i have a nice sized cash savings, i have no reason to keep it in an account like bank of america. and i certainly wouldn't do it to avoid a $5/month fee, i would just move to a bank that doesn't charge the fee.
why would i park $5,000 in bank of america? what benefit do i get?
maybe if Bank of America stopped getting wholesale funding from the central bank, then they'd be relegated to more traditional banking: lending out their customer's deposits.
I suspect that if they needed these deposits to lend, they'd treat their customers better. That is, if they didn't collapse.
i still don't see it as a smart move by them.
That assumes that the other banks aren't also doing/planning similar
hint: they all charge fees for their services
most people i know, even those with great incomes, do not keep a lot of money in a checking account
$1500 or even $3000 is not a lot of money
and to qualify isn't limited to checking
all sorts of other accounts and relationships qualify
so while i have a nice sized cash savings,
you have to keep it somewhere and wherever that is... there will be those fees
i have no reason to keep it in an account like bank of america.
and i certainly wouldn't do it to avoid a $5/month fee, i would just move to a bank that doesn't charge the fee.
well here is the point (again)... they ALL charge fees.
Some you'll see and some you won't.
why would i park $5,000 in bank of america? what benefit do i get?
You have no CD's? No savings? you have to keep that somewhere
hth
ps: pls don't confuse these posts with an endorsement of BOA...
but rather just a general interest in accuracy in the rhetoric.
moaning without accuracy is just whine
Last edited by MrRational; 10-18-2011 at 01:00 PM..
ell here is the point (again)... they ALL charge fees.
Some you'll see and some you won't.
Citation Needed....
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