By  Mon Jun 25, 2012

Banks Change Up Overdraft Fee Policies: 5 Things to Know for the Week

As the week is expected to revolve largely on how policymakers will address the impending student-loan interest rate increase, a couple of big banks will be instituting new fees on overdrafts, which are likely to some customers unhappy.

  • On Wednesday, Fifth Third Bank will be changing its overdraft fee policy. Additionally, many customers with savings accounts will see their accounts converted as part of Fifth Third’s plan to streamline its line of savings accounts. Furthermore, the bank will eliminate its early accounts closure and excess savings withdrawal fees.
  • Starting Friday, U.S. Bank will be charging higher overdraft fees and it’ll also be easier to incur them. The fee will be $15 for items of $15 or less and $35 for items greater than $15. The change is part of a fee restructuring process at U.S. Bank. The bank plans to drop other fees later this year.
  • Another college — Arizona State University — will join the rising trend of offering campus ID cards that also function as debit cards for regular purchases and ATM withdrawals. It is part of an 11-year partnership with Oklahoma City-based MidFirst Bank.
  • This upcoming Sunday is deadline for lawmakers to come up with a way to stop interest rates from doubling on federal student loans. If no action is taken, the rates on Stafford loans will rise from 3.4 percent to 6.8 percent. Nearly 7.4 million college student are expect to be impacted by the possible rate hike. All eyes are on Congress to see if something will be done about it this week.
  • SmartyPig, the bank surrogate with a focus on goal-oriented savings, increased its saving rate to 1.00% APY, up from 0.70% APY. While that rate is highly competitive, in today’s low interest rate environment, there a few online banks that can top SmartyPig’s offering. Still, the rate hike is a good sign.

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