If you currently have a checking account with Citibank, expect to see a little more of your money go towards your monthly fees. The bank has announced that fees for their Citi Rewards checking accounts will go up from $20 to $25 per month beginning in January 2015, while the basic Citibank checking account fee will increase from $10 to $12.
Citibank announced a fee hike and changed balance requirements on certain checking accounts just three years ago, which makes the upcoming increase even more surprising. There are still avenues to avoid incurring these fees, but much like the last fee hike Citi imposed, the requirements will also change.
Previously, an account holder could waive balance fees by keeping a certain amount of money in their accounts that would include lines of credit, credit card and loan balances, and mortgages. These will no longer go toward the minimum balance, making it difficult for the average monthly balance to meet the required amount.
Citibank’s website explains what account holders must to avoid the new service fees. Basic checking account holders will need to make one direct deposit and one qualifying online bill payment each month. They must also keep a combined average balance of at least $1,500 in their checking and savings accounts. The Citi Rewards account won’t require a direct deposit or bill payment, but will required at least $15,000 minimum combined balance between savings and checking to avoid fees and earn a waiver when using non-Citibank ATMs.
The new fee hike and balance requirements will make Citi one of the most expensive places to handle your banking. For comparison, the average fee for a non-interest bearing account, similar to Citi’s basic account, is around $5.26 per month, while Citi will begin charging $12.
It’s still an option to avoid fees altogether, says Greg McBride, Bankrate’s chief financial analyst. “Free checking accounts with no strings attached are still available at many credit unions and community banks and online banks,” he said. “You just need to shop around.”
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