Happy Bank Transfer Day!

[Y2HH]

Again, wait a second...yes, there was a time when banks would pay out 5-10% interest on savings, but at the same time, they were also getting 15% rates on mortgages. The decline in long term interest rates has been an effort of the federal reserve. Has the gap between interest paid out and rates charged significantly? In 1980, mortgage rates sat at around 18%, and savings rates sat at 10%, so I certainly wouldn't say that the gap there has changed.

 

In some ways it hasn't changed, but what it did was take an investment opportunity away from the people that don't not understand stocks, bonds, or markets in general. There is no longer a place for a regular person to put their money and make a decent return on it.

 

If you break down what you just said, here is what we get: The banks continued to make the same amount of money via their normal investment avenues, but the people have been relegated to making almost nothing. In the past, yes, interest rates were higher, but if a person saved/invested in something as simple as savings account, they could make money, too.

 

Keep in mind interest rates on savings/checking accounts are short term, not long term.

 

Also keep in mind, not everyone needs to own a house.

[RockRaines]

I honestly dont understand the outrage of people who are paying for the service a bank provides. Did you think storing your money and making it readily available should be free to you? Did you think the ease of keeping your books online should be something that is just given away to everyone? There is a free way to store your money, its called putting it under your mattress.

[Texsox]

Rock for over one hundred years banks have not only done that for free, they actually paid you for storing your money there. What has changed? Products that the banks themselves invented, promoted, and in some cases forced, onto their customers. When my wife opened a new checking account she told them she did not want a debit card. She was not allowed to opt out of a debit card. She was told she could throw it away when she received it in the mail, but there was not a way to stop the debit card from being created. My objection is I have been regularly making two transfers per month into a savings account. Both come from my checking account, also at the same bank. That does not qualify me for a free savings account. The only ways I can keep my savings account there without a $10 per month fee is to have a $25,000 balance (on an account paying 1%) or have a direct deposit from by employer.

 

I'm moving the account to a bank that does not have those rules and as a bonus, I can make deposits from my phone. So I am complaining that my bank is charging me for services that other banks offer for free. If your local coffee shop started a cover charge to get in the door would you keep paying for it or switch to another coffee shop?

[RockRaines]

Rock for over one hundred years banks have not only done that for free, they actually paid you for storing your money there. What has changed? Products that the banks themselves invented, promoted, and in some cases forced, onto their customers. When my wife opened a new checking account she told them she did not want a debit card. She was not allowed to opt out of a debit card. She was told she could throw it away when she received it in the mail, but there was not a way to stop the debit card from being created. My objection is I have been regularly making two transfers per month into a savings account. Both come from my checking account, also at the same bank. That does not qualify me for a free savings account. The only ways I can keep my savings account there without a $10 per month fee is to have a $25,000 balance (on an account paying 1%) or have a direct deposit from by employer.

 

I'm moving the account to a bank that does not have those rules and as a bonus, I can make deposits from my phone. So I am complaining that my bank is charging me for services that other banks offer for free. If your local coffee shop started a cover charge to get in the door would you keep paying for it or switch to another coffee shop?

SO basically, you need not complain because there are other options? I dont pay for my checking account because I do direct deposit ( i dont understand anyone that doesnt). I expect that the convenience of being able to take out cash from my bank in any location at any time of the day will incur a fee. I expect that being able to not carry cash and electronically pay for items wherever whenever should incur a fee.

 

if you dont like those benefits, then move your money to a small bank without those features or buy yourself a safe and store your money in the basement. I think its very unreasonable to expect these services for free.

 

100 years ago there werent any options, nor was it as easy to actually manage your money and ensure that it was secure from robberies, terrorists or any other disaster. Things have changed as well as peoples demands for everything NOW. If thats not your thing, then you have other options. Complaining is ridiculous IMO.

[Texsox]

You are too young to remember but when consumers complained about ATMs when they were introduced the banks omniously said going to a live teller was too expensive and that the ATMs were a better, cheaper alternative. Today I find it amazing that banking is the only industry I can think of that a machine is more expensive than a human. Are there any systems you sell where it is cheaper for the company to just hire people to do it instead of buying software?

 

And what many people are discovering is you can get those features for free. Again, it was my savings that tipped the balance. No way an account with anywhere from $5,000 to $10,000, maybe 30 transactions a year, 26 deposits, should cost me anything.

[southsider2k5]

Rock for over one hundred years banks have not only done that for free, they actually paid you for storing your money there. What has changed? Products that the banks themselves invented, promoted, and in some cases forced, onto their customers. When my wife opened a new checking account she told them she did not want a debit card. She was not allowed to opt out of a debit card. She was told she could throw it away when she received it in the mail, but there was not a way to stop the debit card from being created. My objection is I have been regularly making two transfers per month into a savings account. Both come from my checking account, also at the same bank. That does not qualify me for a free savings account. The only ways I can keep my savings account there without a $10 per month fee is to have a $25,000 balance (on an account paying 1%) or have a direct deposit from by employer.

 

I'm moving the account to a bank that does not have those rules and as a bonus, I can make deposits from my phone. So I am complaining that my bank is charging me for services that other banks offer for free. If your local coffee shop started a cover charge to get in the door would you keep paying for it or switch to another coffee shop?

 

Effective zero percent interest rates at the Federal Reserve level.

[Texsox]

Effective zero percent interest rates at the Federal Reserve level.

 

Doesn't that also lower the banks' cost?

[Texsox]

SO basically, you need not complain because there are other options?

 

Ever complain about a bad restaurant? There are other options? Ever complain about a car? Same thing. This just hit a wider group of people all at the same time.

[southsider2k5]

Doesn't that also lower the banks' cost?

 

Which is why interest rates have come down.

[RockRaines]

You are too young to remember but when consumers complained about ATMs when they were introduced the banks omniously said going to a live teller was too expensive and that the ATMs were a better, cheaper alternative. Today I find it amazing that banking is the only industry I can think of that a machine is more expensive than a human. Are there any systems you sell where it is cheaper for the company to just hire people to do it instead of buying software?

 

And what many people are discovering is you can get those features for free. Again, it was my savings that tipped the balance. No way an account with anywhere from $5,000 to $10,000, maybe 30 transactions a year, 26 deposits, should cost me anything.

It shouldnt, but there are online savings accounts you can use that wont cost you anything. Its all about doing the research. And ATM's are one of the most convenient awesome inventions of all time. They revolutionized electronic banking.

[RockRaines]

Ever complain about a bad restaurant? There are other options? Ever complain about a car? Same thing. This just hit a wider group of people all at the same time.

Meh, not great comparisons. In this case, people are complaining about paying for a service that they use for their own needs. I dont think I would complain about something like XM radio or Sirius radio in my car because I expect that to cost a fee. I dont complain about tipping a server because I am using their service to make it easier to dine.

[Y2HH]

It shouldnt, but there are online savings accounts you can use that wont cost you anything. Its all about doing the research. And ATM's are one of the most convenient awesome inventions of all time. They revolutionized electronic banking.

 

The point is, ATM's actually LOWERED the banks expenses, yet they charge you for this and call it a convenience. What they neglect to tell you (which they once were telling people when they first came around) is that convenience is a two way street. They no longer have to keep their banks open as long, their banks aren't nearly as crowded which helps them in multiple ways (less cleanup, less unhappy customers that have to wait in long lines, etc.), and let's not forget they replaced people with machines, people that need insurance, take up office space which they have to rent/clean, etc...all because a computer is doing all that for them.

 

That convenience helps them MORE than it helps you.

 

And they're making you pay for doing them the favor of saving them a LOT of money on all the above things I mentioned.

 

Note, a bank isn't merely a "money storage facility". They're BORROWING your money and using it to lend to other people, who pay THEM an interest rate to borrow YOUR money.

[bigruss]

The point is, ATM's actually LOWERED the banks expenses, yet they charge you for this and call it a convenience. What they neglect to tell you (which they once were telling people when they first came around) is that convenience is a two way street. They no longer have to keep their banks open as long, their banks aren't nearly as crowded which helps them in multiple ways (less cleanup, less unhappy customers that have to wait in long lines, etc.), and let's not forget they replaced people with machines, people that need insurance, take up office space which they have to rent/clean, etc...all because a computer is doing all that for them.

 

That convenience helps them MORE than it helps you.

 

And they're making you pay for doing them the favor of saving them a LOT of money on all the above things I mentioned.

 

Note, a bank isn't merely a "money storage facility". They're BORROWING your money and using it to lend to other people, who pay THEM an interest rate to borrow YOUR money.

There are plenty of banks with national/global options that don't charge you though. Customers have to be smarter for what they sign up for, because banks will bleed you dry if you're not careful. I saved probably clsoe to $400-500 in fees by opening up a Schwab account before going abroad, free ATM usage around the world. But I took the time to find that option.

[Texsox]

Meh, not great comparisons. In this case, people are complaining about paying for a service that they use for their own needs. I dont think I would complain about something like XM radio or Sirius radio in my car because I expect that to cost a fee. I dont complain about tipping a server because I am using their service to make it easier to dine.

 

And if they doubled or tripled their rates you wouldn't complain?

[Y2HH]

There are plenty of banks with national/global options that don't charge you though. Customers have to be smarter for what they sign up for, because banks will bleed you dry if you're not careful. I saved probably clsoe to $400-500 in fees by opening up a Schwab account before going abroad, free ATM usage around the world. But I took the time to find that option.

 

There are, however, the nature of that game is often that you have to use the ATM that happens to be where you are. It's not like you're always right by one of their "approved" ATM's.

 

But yes, options exist -- but sometimes people simply can't use them.

 

I have a BOA account because it's really close to my house -- I use it strictly for bill pay, and availability of funds. My Etrade account holds my actual savings/investments. But when I need money from Etrade fast, rather than having to drive to one of the few offices they have, I can wire the money to BOA and have it the next day without having to go far.

 

I rarely use my ATM, which has a daily limit on it just in case -- not to mention I never EVER use my debit card.

 

Anyone that uses a debit card needs to stop, it's just absolutely dumb, and offers you zero advantages. Use a credit card ALWAYS, NEVER a debit card.

[bmags]

The amt. of bank options available the past 10 years have precipitously decreased. Yes, there are options, but after Chase, Citi and BofA it becomes hyper regional.

[StrangeSox]

I posted this in the financial thread last week:

 

[Balta1701]

The amt. of bank options available the past 10 years have precipitously decreased. Yes, there are options, but after Chase, Citi and BofA it becomes hyper regional.

There are still ways around this issue though. There are still plenty of local banks and credit unions if a customer is genuinely looking for one of those, and they will usually offer most/all of the services you want. THere are 8430 FDIC insured banks right now in this country. Local businesses might start having issues if they want to grow because of the concentration of banking, but that's not likely to be a huge issue for most people here.

 

The question is whether you are more interested in higher interest rates, better personal service, or more national issues like ATM's in multiple places that you can use for free or branches in multiple cities.

 

The bank has a right to charge whatever fees it thinks are appropriate to its business model, just like customers have the right to move to a different facility if they feel they are being overcharged. The bigger issues are the hidden fees which are hidden from customers and the fact that the combination of banks and investment firms is key to making the investment firm section become "Too big to fail".

[southsider2k5]

The amt. of bank options available the past 10 years have precipitously decreased. Yes, there are options, but after Chase, Citi and BofA it becomes hyper regional.

 

that's not a big surprise really as people have demanded access to their money instantly all over the world.

[Balta1701]

that's not a big surprise really as people have demanded access to their money instantly all over the world.

This can still happen through smaller banks though, if they either partner with a larger ATM network or if they simply pay the ATM fee themselves in order to keep customers around that they want. There's no reason why this "Requires" a certain level of bank size to happen, it's simply one benefit that can be offered to customers who desire that benefit.

 

It's also an interesting one, because "not having to pay the $10 you'd rack up with a couple of roaming ATM charges" is a direct charge that shows up everywhere, but a 0.1% lower interest rate is probably worth more money to a lot of people, but that is a less direct charge and as such people probably evaluate it differently.

[bmags]

that's not a big surprise really as people have demanded access to their money instantly all over the world.

 

the "people" you speak of consist of a very small percentage of people. That trend is not solely just the market meeting demand. But if I want a smaller bank in my neighborhood, it will have to be the branch closest to me and that's it. There are few smaller banks around me with multiple branches around the city. That's a distinct disadvantage, and there isn't a noticeable middle.

[southsider2k5]

the "people" you speak of consist of a very small percentage of people. That trend is not solely just the market meeting demand. But if I want a smaller bank in my neighborhood, it will have to be the branch closest to me and that's it. There are few smaller banks around me with multiple branches around the city. That's a distinct disadvantage, and there isn't a noticeable middle.

 

If people are keeping their money at the biggest banks, it is a trend, and it is meeting demand. Otherwise the local banks would be stealing marketshare in chunks. Having ATMs everywhere is important, which is why people either stay at, or move to, the largest banks.

[StrangeSox]

If people are keeping their money at the biggest banks, it is a trend, and it is meeting demand. Otherwise the local banks would be stealing marketshare in chunks. Having ATMs everywhere is important, which is why people either stay at, or move to, the largest banks.

 

Yeah, if I didn't travel frequently for work I'd have switched away from one of the large national banks by now, but I forget to stop at the ATM before leaving almost every time and need access to cash for food.

 

That said, a majority of my money is at Motorola Employee Credit Union (where my dad used to work) and I handle almost everything electronically via free wire transfers.

[bmags]

If people are keeping their money at the biggest banks, it is a trend, and it is meeting demand. Otherwise the local banks would be stealing marketshare in chunks. Having ATMs everywhere is important, which is why people either stay at, or move to, the largest banks.

 

My qualm was not with the claim that people want more access. IT was with your assertion that people wanted global access. The smaller banks cannot provide convenient access even in a single neighborhood, let alone city, let alone region. A strong regional bank is a thing of the past. So you have 2 choices, hyper local, or global. If you don't want the big banks, you are usually trading off a SIGNIFICANT amount of convenience within even your own city.

[bigruss]

There are, however, the nature of that game is often that you have to use the ATM that happens to be where you are. It's not like you're always right by one of their "approved" ATM's.

 

But yes, options exist -- but sometimes people simply can't use them.

 

I have a BOA account because it's really close to my house -- I use it strictly for bill pay, and availability of funds. My Etrade account holds my actual savings/investments. But when I need money from Etrade fast, rather than having to drive to one of the few offices they have, I can wire the money to BOA and have it the next day without having to go far.

 

I rarely use my ATM, which has a daily limit on it just in case -- not to mention I never EVER use my debit card.

 

Anyone that uses a debit card needs to stop, it's just absolutely dumb, and offers you zero advantages. Use a credit card ALWAYS, NEVER a debit card.

Well I shouldve been more clear but Schwab was free at any ATM, around the world. Plus no minimum balance, and no fees. Worked wonders for me.

 

And yes, in the States Im 100% credit card.