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New Monthly Fee on Incredible Bank’s Checking Account

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Incredible Bank

Incredible Bank has sent an email to its checking account customers informing them of a new monthly maintenance fee that will take effect on June 1, 2013. In summary, checking account customers will have to maintain a minimum balance of $300 to avoid a $15 monthly fee. Thanks to the reader who forwarded me the email he received. Below is an excerpt of that email:

IncredibleBank, a division of River Valley Bank, is committed to providing our customers with the latest technology while maintaining competitive pricing. Periodically it becomes necessary to change our pricing structure. A maintenance fee of $15.00 will be assessed on your Incredible Internet checking account if the average collected balance falls below $300.00 during a statement cycle. This will become effective on June 1st 2013.

We know having your account information at your fingertips is important to you, which is why we offer free online services which include BillPay, e-Statements, account/item alerts and Mobile/Text banking.

Thank you for your continued business! We appreciate the opportunity to provide your banking services. Please feel free to contact your IncredibleBank Trainer Monday thru Friday 8:00 am to 5:00 pm CST at 877.261.4750, if you have questions regarding your individual needs. We always welcome suggestions for improving our service to you.

Sincerely
IncredibleBank Team

I called Incredible Bank this morning, and I confirmed this new fee will apply to all checking account customers. This might affect customers who had opened this checking account just for the high rate. They may have moved most of their money into other accounts that have higher rates. Those other accounts might not just be at other banks. It may include Incredible Bank’s money market account. If they’re not paying attention to their accounts, they could be in for a surprise for them when they finally notice the fees hitting their checking accounts.

I asked the Incredible Bank customer service rep what would happen if someone had a balance under $15 in the account when the fee hit. I was told the bank would zero out the balance, and the account would be closed. I was also told that the bank would not bill you for the remaining amount owed or consider that amount to be an unpaid fee which would be reported to ChexSystem. The last thing a saver wants is to have a bank ding your ChexSystem report which could prevent you from being able to open accounts at other banks.

This shows why it’s a good idea to stay on top of all you bank accounts, even those with small balances that aren’t used. If you can’t stay on top of those accounts, it’s better to close them.

Reason for the New Fee?

This raises the question about why Incredible Bank is adding this fee. Is it hoping to bring in more fee revenue? That will come with a price of angry customers.

Are these low-balance customers costing Incredible Bank? The email and the customer service rep suggested that is the main reason for this new fee. I was told by the CSR that there is still a cost for maintaining low-balance accounts, and according to the CSR, they have accounts with balances of only pennies. However, it seems like there shouldn’t be much cost for maintaining internet accounts. There are no paper statements, no paper checks, and no 1099s.

Perhaps Incredible Bank is hoping to increase the number of active checking account customers. I would guess that most checking accounts with balances under $300 are probably not being used. One way a bank can make money from active customers is through debit card purchases. There’s an interchange fee for each debit card purchase that you make. This interchange fee is paid by the merchant and goes to the bank. This helps pay for the high interest rates of reward checking accounts. Even though Incredible Bank doesn’t require debit card purchases to qualify for its high interest rate, it may have planned on a significant percentage of its checking account customers using the debit card. That percentage may be lower than it had planned.

We have seen other internet banks adding monthly maintenance fees. One old example is Amboy Direct which added a $5 monthly fee on its Premium Savings Account for balances under $100. This was back in 2009. If you know of more recent examples of internet banks adding monthly maintenance fees, please leave a comment.

  Tags: Incredible Bank, checking account

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Comments
20 comments.
Comment #1 by 51hh posted on
51hh
This is incredibly annoying:D

9
Comment #2 by Anonymous posted on
Anonymous
Bernanke's low interest rates create havoc with the banks and CU. The spread is low and the income can not be generated from such environment.

12
Comment #3 by Bancxman (anonymous) posted on
Bancxman
What incentive does Incredible Bank have to maintain a bunch of penny ante accounts on its books? They still have to track each account and report the interest to the customer and the IRS. That's not a problem for a few accounts, but I suspect they have quite a number of low or even zero balance checking accounts on their hands. Furthermore, depositors with balances that low wouldn't benefit from IB's higher rates anyway. These guys are not a charity. If you can't afford to keep a monthly average of $300 in your account, move to a  credit union.

7
Comment #4 by Wil posted on
Wil
I received that e-mail too. I really didn't pay that much attention to it because it makes little difference to me -- I usually keep close to $10K in my Incredibel Bank checking account. I haven't given serious thought to their money market account because the difference in rates is too narrow to make it worth the bother.

2
Comment #6 by Anonymous posted on
Anonymous
What is the point of saying that 98% of accounts with a <$300 balance belong to individuals with either an Hispanic last name (like Gonzales or Herrera) or an African first name (such as Keshawn or Shaquifa).  Seems that not only is the writer racist but also the  Bank rep which indicates that maybe Incredible Bank is a racist institution.  My last name is Hispanic but I am not but it shouldn't matter what someone's last name is.  It is hardly an indication of anything at all. 

5
Comment #7 by Wil posted on
Wil
While I agree with the substance of Anonyous #6's comment, I think that it is a considerable leap to infer the bank is a racist institution from the imprudent, and irrelevant, comment of a single representative.

7
Comment #9 by Anonymous posted on
Anonymous
While random comments from one single representative may not necessarily indicate the whole institutions policy, it is worth wondering where this representative got this information from.  Is the bank compiling lists of the kinds of people (i.e. racially profilling) that use their institution. 

3
Comment #10 by Wil posted on
Wil
It could just be that particular employee's inference based on his/her access to the bank's account information. The speculation that the bank might be analyzing statistics along racial lines is, from an anecdotal comment posted by Anonymous #5, both unsubstantiated and based on slim evidence. We would need to know more than this in order to draw meaningful conclusions.

3
Comment #11 by Roush posted on
Roush
It may also be possible that the employee's statement was based on hard facts so, unless proven otherwise, lets try to leave racism out of it for a change. I suppose it's to much to ask for, but it sure would be nice to be able to discuss something without the R word continuously being thrown around and without ant proof whatsoever as to whether it is true or not.

4
Comment #12 by Roush posted on
Roush
Correction - typo - word in last line of my post #11 above should read 'any' and not 'ant'. Sorry. 

1
Comment #14 by Anonymous posted on
Anonymous
I got that e-mail too and found this wording to be awkward and unclear: "average collected balance falls below $300.00 during a statement cycle."  Why "collected" balance when I think they mean "available" balance.  Why "average ... during" when an average would be "in" or "for" the cycle.  I had an online chat with Incredible where I was first told it was a minimum if the balance ever fell, and then was told it was based on an average in the month.  I still don't know.

 

3
Comment #15 by Anonymous posted on
Anonymous
Or #5 could have been making the comment up and not have ever talked to, or gotten any information from, the bank. Don't discount that possibility - this is the Internet after all.

5
Comment #16 by Anonymous posted on
Anonymous
I will not let any bank hold any money of mine hostage, the account gets immediately closed. If we all do that, no bank or CU will dare impose any fees or hold our money ransom.
The interest we earn, does not justify any such balance to be given for free they to enjoy.
I closed the incredible account yesterday.

5
Comment #17 by Anonymous posted on
Anonymous
I just closed a CD with this bank and had an "Incredible" time.  They sent me a renewal notice.  I sent a letter to close with the signatures of the account holder and a copy of the maturity/renewal notice.  They called my house and said I had to fill out a CD close form on their web site and fax it to them or they would not close the CD.  I did this and they called and said "Anyone can send this".  So they asked me questions to prove my identity which I did.  They would not ACH my money unless I got on the phone with the bank I was requesting the transfer to with them to confirm the accounts on the form that I sent.  Taking about jumping through hoops

5
Comment #19 by Anonymous posted on
Anonymous
What does the tax bracket have to do with the monthly fee on the Incredible Checking account?

2
Comment #20 by Incredibly Irritated (anonymous) posted on
Incredibly Irritated
Only by keeping their rates above the average will this bank keep my funds.  Their's is the single most user unfriendly banking website I have ever used.  The lawyers apparently have infringed on the design and functionality of their site so as to do everything humanly possible to minimize the liability of River Valley Bank.  They do not care about how irritating the use of their website is.  They seem to care only about being able to defend themselves if internet fraud occurs in your account.

3