NEW YORK ( TheStreet) -- Citigroup ( C) is simplifying its U.S. retail checking account offerings which means more choice for consumers, but potentially higher fees as the bank faces profitability challenges in its retail business in the wake of financial reform.

Citigroup announced Wednesday that it is making changes to three customers checking accounts.

Retail customers who use Citibank's Basic Banking account can waive monthly maintenance fees by completing at least five qualifying transactions per statement period, the bank said Wednesday. Qualifying transactions include everyday transactions like direct deposit, debit card purchases, bill payment, auto deductions, and ATM cash withdrawals.

Customers who do not meet these minimums will be charged $8 per month starting with the November statement period. Checking customers in some areas paid anywhere from $3 to $10 per month previously.

Citibank's mid-level account offers fee waivers for those who maintain a $6,000 monthly balance in linked accounts. Otherwise the monthly maintenance fee jumps to $20 from a range of $9.50 to $15 previously.

Linked accounts can include checking, savings, credit cards, CDs, investments, mortgages, lines of credit and retirement accounts, among others, Citigroup says in a statement.

Finally Citigroup is dropping the minimum monthly balance for customers in Citigold, its banking package geared toward wealthy, to $50,000 from $100,000.

Individuals in this account can waive the monthly maintenance fee of $30 per month (up from $25) by maintaining the minimum in linked deposit-specific accounts.

Citigold customers can also waive the fees by maintaining $100,000 in deposit accounts, investments, credit cards, and loans and lines of credit excluding first mortgages or $250,000 in the same account choices plus a first mortgage, the bank notes.

The changes are part of an overall sweep of Citigroup's U.S. consumer banking businesses for a more targeted strategy and customer-driven simplicity. Citigroup said this year it planned to focus on its U.S. retail business, even as it looks for growth primarily outside the country.

Recently, an internal memo that Citigroup will look to emulate its international consumer banking operations here in the U.S.

Citibank retail branches in the U.S. are just a fraction of money-center rivals including JPMorgan Chase ( JPM), Wells Fargo ( WFC) and Bank of America ( BAC), but still the retail banking business has lagged.

Since last year, Citigroup has streamlined its retail checking account offerings from six packages to four. Citibank EZ Checking account will no longer be actively sold, the bank says.

The changes may look to be beneficial for customers, but Ken Thomas, a Miami based banking consultant and economist, says it doesn't discount the fact that Citigroup and other banks are looking to meet profitability goals after the expected losses from the Dodd-Frank financial reform laws.

"They are doing what other banks are doing as a result of Dodd-Frank, namely trying to maintain retail profitability after considering lost income from the new requirements," Thomas says in an e-mail.

"Like other banks, they do this with a very consumer friendly smile, but the result is very simple: if you use our branches or don't keep minimum balances, you will pay in the form of a monthly fee or otherwise," Thomas says. "Everyone knew that someone would have to pay for the new consumer friendly provisions of Dodd-Frank, and this is just the beginning of a new trend in retail banking."

Citigroup, which needed $45 billion in bailout funds from the government to survive the financial crisis, is undergoing a downsizing of titanic proportions as it looks to slim its balance sheet, shake loose excessive business lines and focus on a few key businesses. The U.S. government still owns roughly 18% of the big New York-based bank.

Citigroup's stock has had a volatile ride this year, swinging from an upside of as much as 50% in April to roughly 12% at Tuesday's close. Citigroup shares reached an intraday 52-week-high on April 15 of $5.07, one day after it posted a positive quarterly profit, but has since fallen back along with the broader financial sector. Citigroup shares were most recently rising 3.4% to $3.84 on volume of 185 million shares.

--Written by Laurie Kulikowski in New York.

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