This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank Transfer Day: Everybody Wins

Still, the victory for customers might be short-lived. Industry observers say banks will find a way to charge customers to make up for the shortfall in revenues one way or another.

That's one more reason why customers still fuming from the debacle are seriously contemplating switching bank accounts.

Big Banks Benefit Too

But the big banks might not be too concerned about people defecting. On one level, they are counting on customer inertia. People might be unhappy with their situation but still not do anything about it.

Even if they do, banks like Bank of America (BAC - Get Report) are betting that they will only lose customers who are not profitable to begin with- the ones who carry low balances. The cost to service those customers outweighs the money they make from them, goes their thinking.

If a bank earns a spread of 75 basis points on a checking account in this low interest rate environment, the average checking account balance should be at least $24,000 in order for the bank to continue offering free checking services, according to Hank Israel at Novantas . But few customers carry those balances.

Which means big banks could actually benefit from Bank Transfer Day as they lose unprofitable customers.

Bank of America and JPMorgan declined comment on the story.

"We respect that consumers have choices when it comes to their banking needs," Catherine Pulley, a Citi spokesperson said. "If a customer wants to close their account, we will accommodate them online, in person or on the phone. But we are proud that customers continue to choose Citi and will work hard to earn their business," she said.

She added that the bank avoided the debit card fee from the start after listening to customer feedback that said the fees were unacceptable.

Citigroup has raised the monthly fees on its checking accounts but offers customers ways to avoid the fee such as making online bill payments and using its direct deposit facility.

Richard Hunt at Consumers Banking Association says small banks also suffer from the impact of new regulations such as the Durbin Amendment as well and that customers should not be misled into thinking that they will get free services if they go to a smaller player. He points to a Credit Union National Association's 2010-2011 Fee Survey that said 91% of credit unions offering debit cards anticipate making some sort of change to their rates, fees and services as a result of the negative impact of the regulation.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.77 1.44%
BANC $20.51 0.79%
C $46.68 0.86%
JPM $63.79 0.93%
WFC $50.59 1.22%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs