Savers Pay U.S. Banks to Keep Cash as Rates Dip, Fees MultiplySubmitted by bobbyw24 on Mon, 08/30/2010 - 07:54
It’s getting tougher for U.S. savers to find a bank where they won’t end up paying to keep their money safe.
The average interest paid on savings, checking, money-market and certificate of deposit accounts fell to 0.99 percent in July, the first dip below 1 percent in a decade, according to researcher Market Rates Insight. Banks also have been raising fees and adding new ones, most recently in response to the financial-services overhaul bill that became law July 21.
The result is that an increasing number of savers are seeing their deposit earnings eaten up by charges. That’s frustrating people like Ken Ward, who recently passed on a savings account with a 0.01 percent interest rate at the Chase bank branch near his home in Wantagh, New York.
“We went to Chase because of the convenience,” said Ward, 57, a stock-loan trader who was helping his daughter find a place to tuck away $10,000. “But with those rates, we might as well put it in the mattress and then at least we won’t be charged any fees.”
Had they gone with the Chase savings account, it would have paid about $1 in annual interest. Potential fees included $4 if the balance fell below $300, $2 for each non-Chase ATM withdrawal and $3 for each withdrawal after making more than four withdrawals in a monthly statement cycle.
Ward said he and his daughter settled on a 13-month Chase CD paying 0.75 percent, and will look for a better alternative when it matures.
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