One of the Risks of Rate Chasing - Inactivity Fees
I looked into many considerations for rate chasers in this post from last year: Internet Banks and Rate Chasing - Is It Worthwhile?. With rates continuing to fall, this is still a reasonable question to ask. This same question was asked recently by Flexo in his blog post at Consumerism Commentary. Flexo also mentioned several important issues to consider.
One rate chasing issue Flexo mentioned that I didn't mention in my last year's post is the risk of inactivity fees. I have been hit twice this year by inactivity fees. One was a $10 fee at my local credit union, and the other was a $5 fee at Patelco Credit Union. Both were due to having no activity on the share savings account after one year. It's also important to note that these fees keep getting applied month after month until you have activity in the account (they don't count the fee debit as an activity). I noticed these fees pretty quickly, and I was able to get these reimbursed by contacting the service reps. If you don't catch them soon, it gets harder to have the old ones reimbursed.
Another fee to watch out for is a low balance fee. There have been cases when internet banks have added a minimum balance requirement or increased the minimum. Amboy Direct added a minimum balance to its online savings account last year. They now require a $100 minimum to avoid a monthly fee. They notified customers of this change in the statements, but with e-statements, it's easy to overlook changes like this.
My experience does show that you need to keep an eye on all of your accounts. If you don't have time and don't want to close the accounts, you may want to consider services like Mint.com (see my review).
One way you can prevent inactivity fees is by setting up automatic monthly or quarterly transfers initiated at a bank like Ally. Each month or quarter, money will be automatically transferred to or from your bank account that you're not using. Just be careful that you don't go over the 6-per-month withdrawal limit on savings accounts.
I became members at both of these credit unions in hopes that their CD rates would remain competitive. Unfortunately, that hasn't been the case in the last year. Thus, I've just kept a little bit in the share savings accounts to maintain membership. I'm sure if I closed these accounts, they would soon be offering some great CD deals ;-)