Another bank is recognizing consumers’ affinity for account customization by launching a program that offers add-ons to checking accounts. M&T Bank, which serves the Northeastern states and holds $80 billion in deposits, now allows checking customers to pay for additional services that — in the long run — could save them money.

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M&T’s new checking-account customization program offers add-ons, including no M&T fee at non-M&T ATMs ($4.95), refund of non-M&T ATM fees ($4.95), no fee for overdraft protection transfers ($4.95), monthly credit scores ($2.99) and discounts on standard checks and a safe deposit box ($4.95).

The add-on fees are collected every month and they cannot be waived, unlike a checking account’s monthly maintenance fee.

However, according to an M&T spokesperson, checking customers can change their add-ons every month (except for the standard checks & safe deposit boxes add-on, which has an annual commitment) through online banking.

For customers with certain banking habits, the add-on program may provide savings.

As an example, customers who use a non-M&T ATM twice per month would have started to save money if they subscribed for the monthly add-on that waived the M&T fee for using a non-M&T ATM. (M&T charges $2.50 per non-M&T ATM withdrawal, $3 for Free Checking customers.)

Or a customer who is about to buy a house may sign on for the credit-score add-on (receive a FICO score, updated monthly) for six months. Similar programs directly from credit bureaus usually cost around $15 per month.

Customers who want several add-ons may be better off with one of M&T’s higher tier checking accounts, which has higher monthly account fees but offers a number of add-ons for no cost. So, since these monthly account fees can be waived when certain requirements are met, these customers can actually get the add-ons without paying the monthly add-on fees.

M&T Bank joins California-based Union Bank and Texas-based Frost Bank in offering checking accounts that come with optional upgrades — an up-and-coming trend, called à-la-carte banking, something we predicted will catch on in 2013.

If there is a desired feature or service, it’ll come as a cost — much like a smartphone plan.

Such a pricing model relies on consumers’ willingness to pay a fee as opposed to the traditional checking account model where the customer plays a flat, all-inclusive monthly fee for services that they wouldn’t typically be needed anyway.

As more bank adopt à-la-carte banking, two consumers with the same checking account could have vastly different features and monthly fees.

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  • Bernadine T. Shea

    Thank you for a very interesting article. Fascinating concept, BRAVO! If it wasn’t for the fact that a lot of consumers have problems when given choices I’d say you’ve got a real
    winner…… However, banking is changing and changing forever….fun for some!

  • Mike Branton

    Good luck to these banks making this work as a la carte pricing violates two consumer buying principles: One, there must be a perceived fair exchange of value when fees are paid. Paying fees for these bank benefits, most of which can still be gotten free at any number of competitors is not seen as fair. Two, a la carte pricing quickly gets too complicated for both buyer and seller. There’s a reason Wendy’s (and other retailers) let’s their customers order a #1 Combo on a bundled basis – it works better for the buyer and seller to transact business.

    Plus, a la carte pricing implicitly has the feeling of being “nickeled and dimed”, which banks get criticized for already.

    Consumers say they want to buy things this way but their actions are different from what they say.

  • M&T Customer

    Also, don’t expect the bank to offer these services proactively. Every time I step into the branch, the teller tries to set something up so someone can call me to discuss investment options for my savings balance. Not once has she or anyone else who I have dealt with mentioned these add on services. Why? Oh, that’s right, they would lose money. For example, with one of these new options, I would have been charged $14.85 over three months. Instead, under the old way of charging fees, I paid $162.50. Shame on me for not keeping on top of this.