Fifth Third Bank (NASDAQ: FITB) will make major changes in a move to streamline its fee structure and savings account offerings. Starting June 27, 2012, checking customers can expect a revamped overdraft fee policy, while savings customers will see the types of accounts available reduced from 13 to three.
“We are making these changes to simplify our accounts. We spend a lot of time talking to our customers to understand what they need and expect in an account and banking relationship,” said Stephanie Honan, a Fifth Third Bank spokesperson. “Our customers have told us they want accounts that are simple, transparent and easy to use.”
Simpler overdraft policy
Currently, Fifth Third’s overdraft and overdraft protection transfer fees vary depending on the number of occurrences over the prior 12-month period. The overdraft fee for the first occurrence is $25; it’s $33 each for the second to fourth occurrences and $37 each for further occurrences.
The overdraft protection transfer fee is $10 each for the first to 10th use, $15 each for the 11th to 20th use and $20 each for any further uses.
Effective June 27, 2012, the overdraft fee will be $37 for each occurrence after the first, which will remain at $25, over the prior 12-month period. Also, the overdraft protection transfer fee will be a flat $12 per use.
The average overdraft fee and overdraft protection transfer fee at the 10 largest U.S. banks are $33.70 and $12.11, respectively. Fifth Third Bank is the 16th-largest bank with $85.7 billion in deposits, according to SNL Financial.
In addition to eliminating an $8 daily overdraft fee, Fifth Third will no longer charge an overdraft fee if the account is overdrawn by $5 of less by the end of the business day.
Due to a federal rule in 2010, consumers must give permission to financial institutions to process transactions that would result in overdraft fees.
Savings accounts restructured
Fifth Third will be consolidating its line of 13 savings accounts, which include grandfathered accounts that are no longer available to new customers, to three core savings accounts.
The three savings accounts include Goal Setters Savings, Relationship Savings and Savings, which will be a new account in Fifth Third’s lineup. The new Fifth Third Savings account comes with a $5 monthly fee that can be waived if the customer maintains an average monthly balance of at least $500, is under the age of 18, or is an active or retired member of the U.S. military.
Honan declined to share the number of customers that will be impacted. Any customers who have their account converted will keep their current account numbers.
Also effective June 27, 2012, Fifth Third Bank will eliminate a $25 early account closure fee and a $5 fee for excess savings withdrawals.
Half of the 10 largest U.S. banks charge an early account closure fee of $25 (the other half does not charge such a fee). The average excess withdrawal fee at the 10 biggest U.S. banks is $7.50.