Dedicated to Deposits: Deals, Data, and Discussion

Beware of Inactivity Fees at Your Bank or Credit Union


With interest rates so low these days, the last thing a saver needs is to be hit with fees. There's a common fee that banks often do not clearly disclose that can easily sneak up on you. It's the inactivity fee. Many banks and credit unions will charge your savings or checking account a monthly inactivity fee after a certain period of time in which there are no customer-initiated deposits or withdrawals.

A reader just reported that his Mega Money Account at AmericaNet Bank has been hit with a $10/month inactivity fee. I called the bank, and confirmed that they do charge a $10/month inactivity fee. According to the CSR, the fee starts after 6 months of inactivity. This policy also applies to Redneck Bank and Evantage Bank. All three of these banks are owned by the same family and have the same policies.

In this March post I described being hit by inactivity fees at Patelco Credit Union and my local credit union. So it's not just banks that charge inactivity fees. If you notice such a fee, be sure to request a courtesy reimbursement. The longer the time after the fee, the less chance you'll be able to get a reimbursement.

You can prevent an inactivity fee by making any type of deposit or withdrawal. It's easy to do, but it's also easy to forget. One way you can avoid forgetting is to set up automatic monthly transfers to or from the account. This is where an internet bank like Ally can be very handy. Ally Bank allows an unlimited number of links to other bank or credit union accounts. Once a link is established, you can set up re-occurring automatic transfers. For example, you could set up transfers so that $5 will be transferred each month from Ally to your other bank. If you want to keep the balance at the other bank small, you may also want to set up these transfers in reverse ($5 to be transferred each month from your other bank to Ally). The only potential problem is that you don't want to go over 6 non-ATM withdrawals from Ally's savings or money market account. However, Ally Bank's interest checking does not have this limitation.

Another way to prevent inactivity fees is to close the account. In my last post on inactivity fees, the reader 51hh commented on how he decides when to close an account:

My position on this is to always close accounts when not used due to low rate, etc. This action makes things a lot simpler in terms of tax reporting, account management, as well as inactivity fee.

If you are thinking about closing an account, don't forget about a potential account closure fee. Most banks only charge account closure fees if you close an account before 6 months of account opening. However, each bank has its own policy on this.



Related Posts

Comments
43 Comments.
Comment #1 by Sheldon Govia (anonymous) posted on
Sheldon Govia
I recently was hit wit an inactivity fee of $4.50 at PerkStreet Bank.

I closed the account

8
Comment #2 by Anonymous posted on
Anonymous
Always be aware of the terms and conditions and schedule of fees that should be available when you apply for an account.  I never quite understood the reasoning behind these fees.  When you do too much activity (outside of a checking account), they penalize you.  And when you don't they penalize you too.

1
Comment #3 by Anonymous posted on
Anonymous
The terms and conditions from their website says that the account is dormant (and subject to the $10 monthly fee) if your account has not had a deposit nor withdrawal for an extended period of time and the bank has been unable to contact you.  Since when is 6 months an extended time period?  And what does it mean when the bank cannot contact you?  Does that mean the mail cannot be delivered to the account address?  Do they send you an email and you don't respond to it?

5
Comment #4 by Anonymous posted on
Anonymous
The previous post was in reference to Redneck Bank.

1
Comment #5 by Cactus (anonymous) posted on
Cactus
I always set up two accounts, easy to do by adding a free checking account with $5 over the minium checking balane.

Then it is easy to just move $5 back and forth between the accounts every month when I check the balance.

Even if you are not actively using an account, you should check online every month in case someone has taken it over.

2
Comment #6 by Anonymous posted on
Anonymous
Inactivity fees can get charged even it you have a CD in good order that hasn't matured yet!

Part of the reason is state regulations about dormant accounts - but that is measured in years.

Part of the reason is that they still think that dormant accounts cost money for statement mailings - even if you have estatements.

And part of it is greed

 

3
Comment #7 by Anonymous posted on
Anonymous
I was also hit with $4.50 at Perksstret.

Besides they did not pay $100 account opening bonus.

When Iasked them to close my account, they relented and refunded both.

1
Comment #8 by Anonymous posted on
Anonymous
The jerks at Chesapeake Bank closed my Clear Sky Account.  They said it was inactive for 1 year (but no fee even though they have an inactivity fee), which is a lie, I did 1 ACH deposit every 2 months.

3
Comment #9 by Anonymous posted on
Anonymous
I agree these inactivity fees are a real PITA. I have a long list of credit unions where I am keeping up membership and constantly must fight this inactivity problem.  I don't do much business with banks any more, just a few.  There is no sense holding inactive bank accounts open since one can always do business with a bank later and not risk inability to join or a fee to re-join.  With credit unions it often is different, so I maintain my memberships.  The other advantage of holding credit union memberships open has to do with time pressure when there is a CD special offer.  It frequently is a LOT easier and less time consuming (i.e., less hassle)  just to open a CD, rather than to have to open both the CD and  a new credit union membership simultaneously.  This is especially true if achieving membership requires first joining another organization.

I take care of my activity issues with ACH transfers from my account at Alliant.  So far so good.  My most annoying CU is AFCU (Agriculture).  They demand activity every six months.  But in the past they were very nice to me, they let me off the hook, when I messed up.  Still, clearly, it is better not  to mess up.








 

2
Comment #10 by Anonymous posted on
Anonymous
I was stung by Patelco last Fall.  Patelco rules state if you keep $150 in in your share account, no inactivity fee.  Patelco started taking the money the first month of the last Qtr of '09 and I did not know until the quarterly statement was received in Jan.  I called and pointed to their rule and stated that was why I get my account above that amount.  I asked if I could get my money back.  Patelco rep told me that dormant account fee imposed my the State of California and they could do nothing for me since it was required to be withdrawn.  I subsequently found out that California collects no fees on dormant accounts.  After the required period of time, the unclaimed funds go to the state and the state holds the funds until the only claims them. I realize Patelco was hit hard by the housing crisis but to lie to customers.  I live in a state without Patelco branches. The girlfriend who had had about $2400 in her account and got her money back when she went to see her branch manager probably got her money back based on the $150 rule.

3
Comment #11 by Anonymous posted on
Anonymous
One of the notorious one for hidden fees is patelco credit union. They not only charged me the inactivity fee but also minimum balance fee that got triggered due to deductions from inactivity fee. It amounted to more than 100 dollars over 5-6 months. They dont even send the notification for estatement so no way for account holder to know they are being charged this amount all of a sudden unless they login.

Bottomline, periodically check your so called dormant accounts.

2
Comment #12 by Anonymous posted on
Anonymous
As for the comment about setting up automatic transfers between Ally Bank and one of your potential inactive or dormant accounts, that does not appear to work if your bank operates like SunTrust Bank.  Taken from the account rules and regulations:

With the exception of Time Deposits and IRAs, an account is deemed "inactive" during that time period in which you have not made any deposits or withdrawals from the Account. Electronic (ACH) deposits or debits DO NOT qualify as deposits or withdrawals made by you.  An Account will be classified as "dormant" when the account has been inactive and we have had no contact with you for 12 months and your Account statement has been returned by the Post Office as undeliverable for any reason.

 

I had one account where I was notified that my account was going to be set to inactive status unless I did something.  I told the Bank that I had an EFT deposit done several months ago and it appeared on my bank statement earlier.   I asked them why that EFT deposit wasn't considered "activity".  It appears they have a similar policy regarding EFT ACH actions like SunTrust bank.

2
Comment #13 by Anonymouse (anonymous) posted on
Anonymouse
perk street dont get me started denied me an account and the 100 bonus reason being becausei deal iewith 10 banks they can kiss my asp hay cactus is that the blue/ agave

1
Comment #14 by spencer.jr (anonymous) posted on
spencer.jr
Huntington Bank charged me a $5.00 inactivity fee.  I had $5.86 in my account before the fee which left me with .86 cents in my account. I called the CSR and asked if she would reverse the charge and she said no, so I asked now that my balance is below $5.00 what happens if I don't create any activity in the future and she said that I would not be penalized since I didn't have enough funds in my account to subtract for the inactivity fee.  She told me that they wouldn't charge me into a negative balance.  I then said to her well so what your saing is if I kept my balance below $5.00 you would of not charged me an inactive penalty fee because my balance would be negative and she said yes.  I then thought to myself well that makes alot of sense "sarcasm" I then told her to please close my account ASAP.

Spencer.

2
Comment #15 by Anonymous posted on
Anonymous
Digital Federal Credit Union also has an inactivity fee. Bummer! Would have thought that a credit union would want members and not want to get rid of them.

https://www.dcu.org/index.html

1
Comment #16 by Anonymous posted on
Anonymous
Posting here after doing some research.  I just got raped by Midfirst Credit union of Middletown Ohio for $30 because of this, on a savings account.  The banks are reinvesting that money and they aren't even paying me interest anymore.  Yet they charge $10 a month, without telling until I get shocked and awed by the quarterly statement showing they took a good chunk of the money I had in there just because they felt like it.  This is nothing less than pure theft of people's honestly earned money.

The whole point of putting your money ina  bank is to protect it from thieves.  At least that is what I thought until now.

3
Comment #17 by Anonymous posted on
Anonymous
Am I crazy or does it make absolutely no sense to open an account and not use it? Why would you have a "long list" of banks you're working with? Sounds like it's the customers, and not the banks, who are suspect.

I've been looking at credit unions and places like Ally and PerkStreet to make a switch from a big bank, and I'm well aware of any fees, including inactivity fees because, as another user pointed out earlier - they're on the website. Laid out perfectly clearly. 

It's your money. Use it wisely and pay attention to the fine print, even when it's written clearly on a website, before you make decisions with it.

5
Comment #18 by Anonymous posted on
Anonymous
Anyone know the account closure policy for BB&T and Suntrust? It seems like they make it as difficult as possible to close an account.

1
Comment #19 by Sandi (anonymous) posted on
Sandi
My Credit Union started charging an inactivity fee just the last two months on the account I have for my granddaughter without any notification.  I am very upset as I would gladly have put a small deposit in every month if I had known the were starting this.  I found out quite by accident while checking to see how much interest she had accrued to balance my Quicken sheet on her account.  You can rest assured I will be putting in a small amount each month in the future.  I was using the cross account transfer to do this and they changed their policy on that and made it so difficult to accomplish this, even though I am a coowner of this account.  It's easy to see why banks and financial institutions are in trouble as they have forgotten what customer service is all about.

3
Comment #20 by Patricia (anonymous) posted on
Patricia
Legacy bank in Blanchard, Oklahoma charged me an inactivity fee of $20.00 per month and didn't notify me. I only found out when I tried to use $200. and  the check was returned as insufficient. I thought I had almost $700. in the account. Legacy bank then charged me a $20.00 insuff. fee. I talked to the bank manager and she was very rude and refused to budge on anything. I am thinking about getting my attorney to fight this. It will cost me more in the end but its the principle! DON'T EVER USE LEGACY BANK THEY WILL RIP YOU OFF!

2
Comment #21 by Credit Union Staffer (anonymous) posted on
Credit Union Staffer
The reason most banks and credit unions are charging inactive fees is because after a certain period of times, the funds are required to be turned over to the State. It's called escheatment. Like a number of others have said, if you're not using the account, better to close it. Your credit union saves money too when you do!!

2
Comment #22 by D from TX (anonymous) posted on
D from TX
I can't believe how banks and credit unions are stealing mine and your money.  I can see charging a checking acct fees but a savings acct, what happened to interest?  If americans don't rise up against big business we will starve to death.  I had $55.33 in a savings acct and I got my statement and they had charged the acct $5.00 each month for inactivity. Well good golly ain't the credit union using the 55.00 conbined with other 55.00's to make money by loaning out money.  As I said it would not be inactive if you would put a penny of interest in the acct like before you started to steal the good people of American's money.  I say shame on you bankers and KARMA is bitting at your heals as we type.

2
Comment #23 by Anonymous posted on
Anonymous
Wells Fargo charges $30 a month. If you do not pay they threaten that you will not be able to get a checking account in the US for five years. Is this legal. I will close account today and never do business with them again.

2
Comment #25 by Anonymous posted on
Anonymous
White House Federal Credit Union in Arlington VA charges an inacticity fee and a closing fee.  My kids each lost $20 for closing their savings accounts there (to avoid the inactivity fee).  Their money is now in TD Bank.

1
Comment #26 by Beth (anonymous) posted on
Beth
I just got hit with a $15 fee -- I only get my statements quarterly.  How can they charge inactivity fee on a Savings Account -- that is just crazy!!!!!  Now I have to figure out what to do about my account and the kids account we have for each kid -- Members First Credit Union (GA) seemed like such a great idea a few years ago! 

 

2
Comment #27 by Beth (anonymous) posted on
Beth
I have to write and update -- I got NO HELP from the branch of Members First Credit Union when I called (twice) but after calling the President and getting a return call the next day they no only credited the $15 fee I complained about -- she went back and ended up crediting me $200 in fees from the past few years!!!  My bad for not paying attention (no my primary account) but they went above and beyond.  She told me their policy is to immediately credit anyone who asks about the fee; it's just there for abandoned accounts. 

I did call the GA Department of Banking & Finance to check on the INACCURATE information I was given the first time I called; so I was fully informed and ready to fight for my money back!

So my advice is to ask and if you don't get helped, keep going up the ladder until you find someone who will help!

Good luck.

2
Comment #29 by Anonymous posted on
Anonymous
Closed a savings account 2 years ago at Fifth Third Bank. Looks like AFTER the account was close a deposit was made for interest...$0.03. Now I just happened to notice that they have now charged a $5.00 inactive fee so the account is now showing a negative balance. Idiots...

2
Comment #31 by Anonymous posted on
Anonymous
I did not realize that there wa a fee for leaving your money in Wells Fargo. However, I feel the customer should be notified that the account is inactive.

1
Comment #32 by Anonymous posted on
Anonymous
CROOKS CROOKS  CROOKS. Who knew?

2
Comment #33 by Anonymous posted on
Anonymous
My 15 year old daughter, who does not yet earn any income, was hit with an inactivity fee.  I telephoned our bank and spent $50 worth of their time getting them to reverse the $5 fee.  I also told them that if it happens again, I will be wasting alot more of their time in the future.

4
Comment #34 by William (anonymous) posted on
William
I was hit with 5 dollars a month by Harborstone Credit Union in Washington State. I was keeping the account just to have one in the US. I am American, but have been living in Europe for about 20 years.

If I open an account ever again in a US bank, this will be one of the first questions I ask. But it seems there isn't much reason for me to open one. I live in Germany, and am quite happy with my bank.

 

1
Comment #35 by Anonymous posted on
Anonymous
The credit union with which, I had 60K 5 year CD ladder, wanted to charge me an inactivity fee. How much activity does a bank expect on a 5 year cd. Where do you keep your money under the mattress?

2
Comment #37 by Anonymous posted on
Anonymous
#35:  I do hope you challenged them and refused to pay that inactivity fee on that CD.  As far s I am concerned, if they pay you monthly or quarterly interest and even if you just leave it in the CD to compound that still is activity on the account.  If they send you the interest in the mail or electronically to another bank, they, too, would be activity.  I don't think we have to personally do anything with the CDs to be considered doing activity on the account.  Each month I withdraw my credit union interest from a shared branch and my statement shows the withdrawal.  That is certainly activity.  We just can't allow these banks and cus to nickle and dime us for whatever they can get us to pay just because we don't call them down on their actions.

2
Comment #38 by gene (anonymous) posted on
gene
i've been subected to this thievery, also.  when I found that my account had been robbed of $10.00 because of inactivity, and, disgusted over the ethics of this legal illegal money grab, I went to c union, talked to a glorified secretary who was in charge, asked her how many transactions I would have to make to avoid having another $10 stolen, she told me at least one.  I then asked her for a withdrawal of $1.00, which she wrote a check to me for.  I then asked her now long I could go without a transaction before I was robbed of another $10.00. she gave me a date.  I signed the $1.00 check I had just received and told her to deposit it.  she didn't like that at all.  I told her to get used to it, 'cause I was going to be back in less than six months and do it again...and again...and again....at which time she was livid..but done it.  I told her that if this c.u. could play games with robbing members of their savings, I could play games and recommend that everyone else to the same thing....the ten dollars that they stole ought to cover any administrative costs.

4
Comment #39 by lou posted on
lou
Gene, well done.

3
Comment #40 by Anonymous posted on
Anonymous
I deposited $2000 into an IRA 30 years ago.  

BANK of AMERICA took ALL of it through inactivty fees.....

I honestly can't believe that a retirement account is not protected from this....

 

 

5
Comment #41 by Anonymous posted on
Anonymous
Whenever you have any type of account at Bank Of America, then you are not protected.  This is the most crooked bank in the universe.

2
Comment #42 by Anonymous posted on
Anonymous
The banks could at least try to contact you before they take it. 

2
Comment #43 by Anonymous posted on
Anonymous
First Niagara Bank has an inactivity fee of $12.00 a month.  The fee was charged for 5 months before I noticed it since I wasn't using the account and didn't bother to go on line to look at my statements.  I also noticed that what had been a free account now had a #3.00 per month basic fee so the total fees on this inactive account was $15.00 a month.  I was careless.  They are sleazy.  They could have sent me an email telling me of the status change and the fees but they did not.  There is supposed to be some kind of reasonable relationship between fees charged and the cost of providing any good or service.  Since I received statements electronically what could those costs have been?  Essentially zero.  To me it is simply theft and the fact that the fee is probably listed and not hidden does not change my opinion.  I am closing two personal checking accounts my family has with them and opening a totally free account with Ally.com

4
Comment #44 by Anonymous posted on
Anonymous
ORNL federal credit union in Knoxville, Tn.  stole $20 from me for inactivity on my account.  I was going to open up some cd accounts with them.  Not any more.  I will close my account and go somewhere else.

2
Comment #45 by Anonymous posted on
Anonymous
biggest crooks in this country BANKS! OIL CO. and INS CO.

1
Comment #46 by Anonymous posted on
Anonymous
I opened a savings account in Colorado inaround 2002 while visiting my brother at a credit union.  I would send them about 25.00 every couple of months. I moved and forgot about after 2004.  I had over three hundred at the time.  I just called them to transfer the money back hear thinking I made a little interest over time only to find out my money was gone because of inactivity fees.  I really feel like I got robbed, I can understand with checking but savings your lending them money.  Its just not right.

1
Comment #47 by Anonymous posted on
Anonymous
Under different state laws, money escheats to the State after a certain period of inactivity but the fees are arguably away around all of that.  But, one may want to look for the escheats laws in Colorado and perhaps the cu should have forwarded some $ to the Colorado Treasurer/Secretary of State (or whoever the funds go to).  Thereafter a person can make a claim against the State for a refund...all within certain time periods.

1