Bank on This

While the cost of living in this city makes sticking to a budget all but impossible, there was, until recently, at least one way New Yorkers could feign frugality: By keeping a mental list of cash machines to avoid at all costs – the ATMs that levy an extra noncustomer surcharge.

Then, earlier this month, Chase started charging non-customers who use its ATMs. (Chase customers who maintain a certain minimum balance don’t get charged at Chase ATMs, of course.) While it was merely the biggest of a string of banks that had already done this – 77 percent of the city’s banks now levy such fees, up from 7 percent last year – Chase’s move made all the difference. It didn’t used to matter who your bank was, so long as you were near a Chase or Citibank (which is expected to join the fee-levying majority soon) when you needed cash. That’s often no longer the case, but with a little sleuthing – and a moment’s consideration of what, exactly, you’re looking for in a bank – you can find a bank that meets your needs and still eliminate (or at least minimize) ATM and other annoying fees.

Banks claim that if they didn’t levy a surcharge, customers would be subsidizing noncustomers. But that’s not exactly true: When a Citibank customer withdraws money from a Fleet ATM, for example, Fleet charges Citibank a fee to cover the cost of its customer’s transaction. But it also charges the Citibank customer an extra $1.50. The surcharge is pure profit for Fleet. In his latest book, Why Not Me?, Al Franken runs for president on the single-issue platform of ATM fees, and wins. (Bill Bradley might want to mull that one over.)

Fleet, Chase, Dime, Greenpoint, Fourth Federal, Apple, Emigrant, M&T, and Marine Midland all levy surcharges, ranging from $1 to $1.50 per “foreign” ATM visit. For now, Citibank, Republic, Independence, Amalgamated, and Bank of New York do not, but don’t expect them to hold out for long. “We’re going to wait and see what happens,” says Susan Weeks of Citibank. “In other markets we’ve had problems with capacity.” In other words, as Ken Herz of Chase puts it, “If you go to a Citibank ATM you could be waiting in line behind all the other noncustomers drawn to the free ATMs.”

If you’re an ATM junkie, dipping into your account more than twice a week, you now basically have no choice but to find a bank with a large stable of machines – in other words, Chase, Citi, or Fleet. In some respects, these megabanks assume that you are willing to pay extra fees and/or maintain higher balance requirements for the convenience of buying insurance, mutual funds, credit cards, and loans at the same place. But even if all you want is a plain old checking account, chances are the megabanks can still save you some money on ATM fees. (Keep in mind that just three “foreign use” surcharges a week can add up to $234 a year.) Chase (for locations, call 935-9935) has 69 branches and as many ATM locations in Manhattan, so you’ll never need to go near another bank’s ATM. At Chase, online banking is free, the ATM cards double as debit cards at any store that accepts MasterCard, and the 24-hour customer-service line actually lets you talk to a human being, even on holidays. To avoid monthly maintenance and transaction fees of any sort, you’ll need to maintain an average monthly balance of $3,000 in your checking or a combined balance of $4,500 in all your accounts. Citibank has almost as many branches, and with Citi you can get away with a combined minimum balance of $1,500 – including even your credit-card debt.

If you can live with the inconvenience of a bank that has only three branches – and as many ATM locations – in Manhattan, check out Fourth Federal Savings (1355 First Avenue, at East 72nd Street; 1751 Second Avenue, near 91st Street; 242 West 23rd Street; 288-2005). Customers with direct deposit get free checking and free ATM use. (They still get hit with surcharges if they go to a machine that charges them, of course.) Better still, their accounts earn interest whether the balance is $15 or $15,000. It’s only 2 percent, but at least it’s something. (Others in Fourth Federal’s peer group: Amalgamated and Independence Savings.)

Medium-size banks like Republic National Bank of New York (for locations, call 718-488-4050) try to offer the best of both worlds; Republic’s big enough to offer extra conveniences that small fry like Fourth Federal can’t, but as with the small banks, its fee structure is relatively gentle. It has 26 Manhattan branches, and if you meet its minimum-balance requirement of $1,500 (in all your accounts combined), it won’t penalize you for using its ATMs or anyone else’s (which still doesn’t protect you from those with foreign-use surcharges, of course). It also offers low-rate rebate credit cards (prime plus 2.9 percent). Several of its ATMs, like the one at the World Trade Center, even dispense postage stamps and MetroCards.

If you’re dumping every spare penny into the stock market and don’t plan on keeping even $1,500 in checking just to duck the maintenance fees, an account like Fleet Bank’s Self-Service Checking might be right for you. Customers who have direct deposit pay $5 a month and get unlimited electronic transactions (telephone, ATM, and online banking). You’re allowed some teller-assisted transactions, but if you do something at the window that could have been done electronically, such as deposit a check, you get zapped for $2.

Citibank (call 627-3999 for details) was the first among area banks to develop PC banking, and it’s still the best. You don’t even have to sign up. Just go to, and type in your Citicard number and ATM pin. On its fast, easy-to-navigate site you can review several months’ worth of credit-card statements, transfer money between accounts, or pay the mortgage. Bills from utility companies and places like Bloomingdale’s can be paid instantaneously, and Citibank will mail a check to unwired merchants, like your parking garage, thereby saving you a stamp. To supplement its online investment service – any number of equity shares can be purchased for $19.95 – it provides extensive market news, company profiles, and stock quotes. The best part? It’s all free. At least for now.

Bank on This