MONEY Banking

Banking Group Says ‘Consumers Hold All the Cards’ And Pay Almost No Fees

atm-fees
Ale Ventura—Getty Images

61% of consumers pay no ATM access or banking maintenance fees at all.

Sick of tacked-on ATM and banking maintenance fees? You’re doing it wrong: most Americans aren’t paying them at all.

According to a survey conducted by the American Bankers Association, 72% of bank customers spend $3 or less on a monthly basis in maintenance and ATM access fees, and 61% pay no fees at all. The survey, conducted annually by the ABA since 1998, involved a national sample by telephone of 1,000 adults aged 18 and up.

“The financial services marketplace remains highly competitive and consumers hold all the cards,” ABA’s senior vice president and deputy chief counsel for consumer protection and payments, Nessa Feddis, said in a press release Wednesday. “Today’s consumers have become adept at using the many options that may allow them to bank for free, whether it’s maintaining a minimum balance, opting for direct deposit or using ATMs owned by their bank.”

The low percentage of fee-payers marks a notable shift since 2009, when the annual account fees collected by U.S. banks were at an all-time high—$41.1 billion—and marked a major source of banks’ revenue. Today, account fees are down after steady growth from 1942 to 2009, and account for about $31 billion in revenue: almost 25% less than at their peak. But consumers don’t get all the credit for the shift: experts point to a 2010 Federal Reserve regulation requiring customers to opt-in to overdraft coverage that banks charge a fee for as another major catalyst.

But let’s say you’re still paying fees, or, potentially worse, don’t know what you’re paying. 8% of Americans surveyed by the ABA weren’t sure whether they were paying fees or not, and according to a survey by the Pew Charitable Trusts, most checking account users don’t understand their bank’s overdraft policies.

Feddis’ statement contains a few key tips: keep a minimum balance, use direct deposit, and avoid ATMs that don’t service your bank. The ABA has a few more: If you don’t have overdraft coverage, watch your balance—or better yet, set up text alerts to warn you when you’re getting low. Check whether your bank will offer free services if you open both a checkings and savings account with them. And, if you’re a college student, scope out whether your college has partnerships with any nearby banks.

Read next: 3 Stupidly Simple Ways to Make Sure You Never Ever Pay ATM Fees

MONEY Banking

7 Things College Students Need to Know About Picking a Bank Account

college students with backpacks at atm machines
Norma Jean Gargasz—Alamy

Understand a bank's fees, ATM network, account options, and more.

College season is nigh, which means that millions of freshmen from around the country will leave the snug confines of their childhood home for a room with a view of the quad.

For many 18-year-olds, this newfound freedom will also bring the first taste of financial independence. While some may already have savings accounts in place, most will have to set up new accounts as they leave home and manage day-to-day cash flow for the first time.

Parents may worry their children will stumble. After all, even adults make unnecessary banking errors all the time. But plenty of mistakes can be avoided with a little bit of planning and foresight.

College freshmen should consider the following seven rules before starting a relationship with a financial institution.

1. Focus on Free

Almost by definition, students don’t have a lot of money—so they need to be especially conscious of fees that can eat away at what little funds they do have. MyBankTracker.com co-founder Alex Matjanec recommends looking for an account that has the following features: no monthly maintenance fee, negligible or no minimum balance requirement, free debit card, free ATM usage at your bank, free online banking, free check writing, and no money transfer fees. (One place to start looking is Ally, MONEY’s 2014 pick for Best Online Bank.)

Check out the new MONEY College Planner

2. Mix It Up

Your checking and savings account don’t have to be at the same bank, especially if you can receive a higher APY on a savings account elsewhere. You may have to go online to find the best deals, something that shouldn’t concern most millennials who were raised on the Internet.

“Online savings accounts offer higher yields and lower minimum deposits while maintaining access to the money and the safety of federal deposit insurance,” says Bankrate.com’s chief analyst Greg McBride. (For savings accounts, MONEY recommends the Barclays Dream Account.)

Make sure you’re comfortable transferring money electronically, however, otherwise you’ll have to mail in any deposits. If your part-time job involves a lot of cash, for instance, you might be better off at a bank with brick-and-mortar locations.

3. Ditch the School Pride

You may be tempted to just go with the first bank you see near campus, or the one your university seems to endorse. Not so fast, though.

“Don’t pick a bank or credit union just because your school has a relationship with them,” says NerdWallet.com’s Nico Leyva. “Make the decision after doing the research to determine what is going to suit your needs best.”

4. Weigh ATM Convenience

A checking account is essentially a spot to store short-term cash—so when you need to access that money to buy stuff, you’ll want to avoid ATM fees. You have a few options to consider.

  • Large national banks will probably offer a number of branches and ATMs from which you can access your cash for free. Just make sure that you’re not being hit up for other fees on the account.
  • You can also look to regional or community banks with a strong presence near campus; these may have fewer fees than their too-big-too-fail counterparts. Unless you’re sticking close to home, however, be sure that your parents can transfer money easily into this account without fees.
  • Another option is a credit union. “Many credit unions offer free withdrawals through a shared branching network that includes thousands of locations nationwide,” says Tristram Coffin, CEO of Alternatives Federal Credit Union in Ithaca, N.Y. The Co-Op network, for instance, offers access through 30,000 ATMs from 3,500 credit unions.
  • Online accounts also tend to provide a number of free ATM transactions. But read the fine print; Ally, for instance, recently installed a cap.

5. Use Your Phone to Keep Tabs

Your phone can be a powerful tool for keeping an eye on your balance. “Using technology to monitor your account activity and available balances is a great way to be on guard against fraudulent transactions and also your best strategy to avoid costly overdrafts,” says McBride.

Most bank apps also include other features, like mobile check deposits and real-time alerts that let you know when your account is below a pre-set limit.

6. Beware Overdraft Protection

While the name may sound prudent, overdraft protection is generally something that students want to avoid. Because such services usually bring high fees, you’ll be better off simply sticking to a budget — or accepting the embarrassment that comes with a declined transaction.

“Don’t let anyone persuade you into overdraft protection,” says Money-Rates.com’s personal finance expert Richard Barrington. “Overdraft fees are very expensive, and in particularly college students should learn to do without overdraft protection so they develop responsible banking habits.”

7. Think Ahead

If you’re using a specially designated student account, be aware of any age restrictions. “Many student accounts have age limits, at which point the account converts into a standard checking/savings account with different fee structures,” says Matjanec.

If you’re going to get stuck with an automatic conversion, make sure the standard account doesn’t come with onerous fees, high monthly minimums, or other undesirable traits.

Read next: 3 Secrets to Maximizing Your Credit Card Travel Rewards

MONEY’s 2015-16 Best Colleges rankings

MONEY Banking

Here’s How Many Bank Accounts You Really Need

Man at bank
Getty Images

The answer largely depends on what stage of life you're in.

When it comes to your personal bank account, simplicity rules. Keeping tabs on a half-dozen checking and savings accounts — not to mention trying to remember user names and passwords, and worrying whether you’ve actually picked the right account in the first place — can feel like a full-time occupation.

Yet minimalism doesn’t always work in practice. Complications abound, particularly when you add a spouse and children to your life.

To help readers understand how many bank accounts they actually need, MONEY isolated three separate scenarios: a single 20-something recently out of college and new to the workforce; a married couple in their 40s with two kids at home; and a retiree couple enjoying life in their 60s. Then we checked with a number of banking experts to help determine a no-drama banking plan for each.

Read Next: These Credit Cards Have the Best Perks

The mantra to remember: Each account should be opened and used with for a specific purpose.

Gen Y & Single: 2 Accounts

“A typical young adult needs just two bank accounts: a checking account and a saving account,” says Alex Matjanec, co-founder of financial data website MyBankTracker.com.

The checking account should work as the fulcrum of the millennial’s banking activity: Paychecks enter via direct deposit and bills are settled here. (With scant resources, young workers should be especially cognizant of fees; consider either Ally, named MONEY’s Best Stand-Alone Checking Account last year, or a no-fee account at a nearby credit union if you’d prefer a bank with physical branches.)

The other part of the equation should be a “high-yielding savings account to help build an emergency fund for life’s unexpected expenses,”says Matjanec. Only one-third of millennials have built an emergency fund that could deal with an $1,000 unexpected trip to the hospital or a $500 car repair, according to Bankrate.

Read Next: These Credit Cards Will Hit You With the Most Fees

Shoot for about six months of essential expenses, and separate it from your day-to-day cash flow. “Doing this in savings rather than checking will allow the money to earn interest and help the young consumer resist the temptation to spend the accumulating balance,” says Richard Barrington of Money-Rates.com, another consumer comparison site. Check out the no maintenance-fee Barclays Dream Account, currently with a 1.05% APY.

Married With Children: More Specialized Accounts

For married couples, banking needs are more complex. At minimum, most will want a joint savings account along with separate checking accounts for each spouse. “A married couple should pool long-term resources and be on the same page about long-term savings goals, but for everyday checking it is better to maintain separate accounts,” says Barrington.

New savings goals may also require additional accounts. You may want to build up a down payment for a house in a CD, to gain higher interest rates while protecting your cash from the market’s vicissitudes. (Synchrony Bank currently has a 24-month CD paying out 1.45% with a $2,000 minimum deposit.) In fact, think about adding dedicated a separate savings account or CD each time you conceive a new savings goal. You can even nickname the accounts, like “Kitchen Renovation,” to help you keep up your savings rate.

You don’t need to keep everything at the same bank; if you’re willing to stomach the additional complexity, you may be able to find better options at different institutions. “Look to each account as a fresh choice of bank, and you very well might find that different banks have the best solution for different situations,” says Barrington. Just make sure that, for each account, you maintain the minimum required to ensure the lowest fees.

Retirees: Scaling Back

Eventually your kids move off to college, your career winds down, and your big savings goals have — hopefully — been accomplished. Other than your house, the majority of your assets are probably parked in retirement and brokerage accounts. So do you still need a savings account?

“When a retired couple is in the decumulation phase of life, I believe they do need a savings account to store easily accessible cash for emergency purposes,” says Ryan Wibberley, chief executive of CIC Wealth. The car and mortgage may be paid off, he points out, but it still makes sense to store six months’ worth of emergency funds for less predictable items like prescriptions, other health care bills, and home or auto repairs.

Wibberley recommends a joint savings account with a transfer-on-death designation, in case you and your spouse pass away at the same time. “This way, the beneficiary could have immediate access to these funds,” he says.

The size of your fund will also depend on certain tax obligations. “Most of my clients have paid-off homes, so we need to plan cash reserves accordingly for their twice-annual property tax bills,” says RBC financial advisor Darla Kashian.

As for checking, Wibberley has three words of advice: “keep it simple.” That means owning one joint account, so you needn’t worry about accessing cash when a spouse dies.

“If there are individual bank accounts, then those accounts would be held up in probate, unless you place a transfer -on-death designation on these accounts,” he says.

Winding down additional accounts may not be the most entertaining task on your to-do list. The upside, however, is that you’ll have fewer to monitor in your golden years.

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TIME Banking

This Is the Most Valuable Bank In The World

A woman walks past teller machines at a Wells Fargo bank in San Francisco, California.
Robert Galbraith—Reuters Wells Fargo promised to enact new Temporary Leave Underwriting Guidelines and educate their loan officers.

Forget the big investment banks, it's all about the basics here.

Forget those flashy big-name banks that always snag headlines. The title for world’s most valuable bank goes to Wells Fargo & Co.

The San Francisco-based bank recently zoomed past Industrial & Commercial Bank of China as the bank with the largest market value worldwide, reported the Wall Street Journal. Wells Fargo is worth $301.6 billion. That’s $40 billion more than J.P. Morgan Chase and almost $120 more than Citigroup.

As China’s stock market struggles and the relative strength of the U.S. economy continues to grow, it’s been a boon to American banks like Wells Fargo. ICBC and Wells Fargo have continually battled for the global top spot, and Wells Fargo first passed it in value in 2013. But, Chinese banks are facing new growth obstacles as the economy inches along, slowing down their expansion significantly from long-running double-digit growth. ICBC shares have fallen about 19% in the past three months, the WSJ reported.

Wells Fargo’s stock has gained 12.4% so far this year, making it the seventh-largest stock in the Standard & Poor’s 500 index. However, when it comes to the largest U.S. bank by assets, that title is still held by J.P. Morgan.

Wells Fargo’s booming market value is a credit to its relatively simple style of business. It doesn’t rely on subprime loans, complex derivatives or risky trades funded by borrowed money. Instead, it focuses on its core units like consumer lending, banking services and mortgage origination. That straight-forward approach may be why Warren Buffett has long been the bank’s largest shareholder (and one of Fortune’s World’s Most Admired Companies).

READ MORE: The big banks of the Fortune 500 that keep getting bigger.

TIME Cuba

Doing Business In Cuba Just Got A Whole Lot Easier

A man drives his taxi past a Cultural Center with the word "Cuba" on it, in Havana, Cuba,, April 14, 2015
Desmond Boylan—AP A man drives his taxi past a Cultural Center in Havana on April 14, 2015

A Florida bank established the first connection with a Cuban counterpart since President Obama’s December decision to open up relations between the two nations.

Stonegate Bank and Banco Internacional de Comercio S.A. (BICSA) signed a deal on Tuesday in Havana that would establish a correspondent account for the Florida-based bank on the island, making it easier for U.S. companies doing business in Cuba to process transactions directly, reported the Wall Street Journal.

Correspondent accounts allow banks to send money back and forth across international borders. Some U.S. business transactions in Cuba use U.S. treasury licenses, but all commercial deals end up going through banks in third countries, adding another step to the process.

These kinds of accounts have come under close scrutiny by federal regulators due to their historical ties to money laundering and other criminal activities, and banks have been hesitant to work with counterparts in other nations that don’t have strong oversight of their banking systems. Cuba has been labeled “high-risk” by the Financial Action Task Force, an organization that supports policies to prevent money laundering.

“We did an extensive risk-management approach to this,” Stonegate Bank CEO Dave Seleski, told the Wall Street Journal. “We feel very comfortable that we did something that is very low risk.”

The move could be the first step toward closer financial ties between the two nations, including the eventual approval of the use of credit cards in Cuba. U.S. credit cards don’t currently work on the island, though the companies have said they would start processing transactions this year.

TIME Banking

This Major New Banking Rule Takes Effect Today

Paul Volcker
Bloomberg/Getty Images Paul Volcker in 2013.

The Volcker Rule is meant to prevent banks from making certain risky bets

A rule that was supposed to be implemented back in 2010 becomes a reality Wednesday five years after its inception.

The so-called Volcker Rule, which is Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is meant to restrict big U.S. banks from making risky speculative bets with funds from their own accounts through proprietary trading. The intent was to keep banks from the kind of hedging that puts customers in danger, helping to prevent another crisis like the one that brought the American economy to its knees in 2008.

The rule was initially scheduled for implementation in July 2010, but was repeatedly delayed. It is colloquially named for the economist who came up with it: former Federal Reserve Chair Paul Volcker, who led the economic recovery advisory board President Barack Obama assembled in 2009.

There have been successful lawsuits seeking to change the initial proposal over the past few years — as well as the requisite slew of media reports about bankers anxiously anticipating the rule’s implementation. But now, as the New York Times reports, the rule “was greeted with a shrug.” Many of the banks to be governed under the rule, including Bank of America, Citigroup, and Goldman Sachs, have killed off a number of practices that may fall under its restrictions, including their proprietary trading (“prop desk,” in Wall Street speak) operations. Goldman’s prop desk went to the P.E. firm KKR in 2010.

The Financial Times reported this week that the rule’s arrival has led many banks to quickly sell off certain securities, such as CLOs (Collateralized Loan Obligations), which cull together high-risk corporate loans and would constitute a violation of the rule if they were obtained after January 2014.

As the Times points out, there is still widespread uncertainty about exactly how the Volcker Rule will be enforced. Banks may sound blasé and unconcerned for the moment, but come later this summer, regulators will begin the first audits for compliance.

MONEY Banking

5 Reasons Why You Should Totally Ignore Bank Sign-Up Bonuses

150630_FF_BankSignupBonus
Mike Kemp—Corbis

Thanks, but no thanks.

An offer of $25, $50 or even $200 to switch your accounts to a new bank can be very tempting. Who wouldn’t want the extra cash? But before you agree to move your money to a new institution, read the small print that comes with the offer, and consider other factors, such as account fees, restrictions and how happy you are with your current bank.

You may decide that a sign-up reward isn’t a good enough reason to switch. Here are five reasons why it may make sense to skip the bonus offer.

1. You could end up paying more in bank fees

Many banks that offer sign-up bonuses require you to keep a minimum balance, and that amount could be as high as $1,500. If your account dips below that level, you may have to pay monthly fees of $12 or more, which could eventually wipe out the bonus.

The account could also have overdraft fees, which are often around $25 per instance. You might be careful with your budget, but one overdrawn check could be costly. According to the Consumer Financial Protection Bureau, overdraft and non-sufficient-funds fees “represent 60% or more of consumer checking account fee income” for banks.

If you’re trying to cut expenses, a free or low-cost checking account at a bank that doesn’t offer a sign-up bonus but has lower fees could be a better deal.

2. The bonus may not be as big as it seems

Shantel Moses of Brooklyn, New York, says she received a sign-up bonus of $50 to join an online bank a few years ago.

“Everything was great until it came time to do my taxes,” Moses says. That’s because the bank sent her a form stating that the bonus should be counted as taxable income, she says. When you consider the tax bite, the size of any bonus may not be worth the hassle of switching accounts.

“After taxes, the 50 bucks was really more like 30 bucks,” Moses says.

3. There will probably be restrictions

Some banks require you to enroll in direct deposit before you can receive the bonus offer. If an automatic deposit isn’t received within a certain timeframe — say, 60 days — you might not get the benefit at all.

Another common requirement is to complete a certain number of debit-card transactions each month. If you sign up for a checking account to get a cash bonus, but then have to use your debit card to make eight purchases every 30 days, you might end up spending the bonus just to meet the terms of the account.

Banks may also require you to keep your account open for 90 days before you’re eligible for the reward. Even then, it could take an extra couple of weeks for the funds to arrive.

4. You could get hit with an account closing fee

If you choose to switch from one bank to another to get a sign-up bonus, but you opened your last account within the past year, your old bank may charge you money to close the account. Some financial institutions have fees of around $25 to close an account that was opened within the previous 180 days.

5. You could still get a bonus without switching

When Moses joined her online bank, she decided there was no need to switch again. After a while, she noticed the bank was offering rewards for referrals.

“I referred my niece, and got another bonus,” Moses says. She was able to get a reward without having to change banks.

If you receive a sign-up bonus offer from a bank, it’s smart to compare that offer with your other options. You may decide that it’s better to pass on the bonus in favor of another financial institution’s offerings that could give you more bang for your buck.

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MONEY Travel

5 Things American Travelers Should Know If They’re Visiting Greece

Supporters of the NO vote in the upcoming referendum, gather during a rally at Syntagma square in Athens on Monday, June 29, 2015. Anxious Greek pensioners swarmed closed bank branches and long lines snaked outside ATMs as Greeks endured the first day of serious controls on their daily economic lives ahead of a July 5 referendum that could determine whether the country has to ditch the euro currency and return to the drachma.
Petros Karadjias—AP Supporters of the NO vote in the upcoming referendum, gather during a rally at Syntagma square in Athens on Monday, June 29, 2015.

Greece-bound tourists could be in for some hassles—or worse.

The crisis in Greece has caused the closure of local banks and brought about the worst day of the year in the U.S. stock market. Concerns are also being raised that the situation could ruin the vacations of tourists dreaming of exploring the culture, history, and warmth of Greece during the height of the summer season.

Here’s what travelers should keep in mind if they’re heading for Greece anytime soon.

Arrive with ample cash. Starting on Monday, banks in Greece were closed, and ATM withdrawals were being limited to €60 (around $67) for cards issued by Greek banks. Withdrawal restrictions don’t apply to foreign cards, but many ATMs have reportedly already been emptied and have no cash to dispense.

“Automated-teller machines are running dry and many businesses are no longer accepting credit cards,” the Wall Street Journal reported.

The bottom line is that the situation is fairly chaotic and very much in flux. Greece-bound tourists from Germany, the UK, Canada, Australia, and elsewhere have officially been given some variation of the warning to arrive with “sufficient euros in cash to cover the duration of your stay, emergencies, unforeseen circumstances, and any unexpected delays.” Ideally, bring cash in lots of smaller denominations, as it may be difficult for taxi drivers, restaurants, and other local businesses to provide change for big bills.

The advice of the U.S. Embassy in Greece is that Americans should have plenty of cash, and should certainly not rely on any single form of payment: “U.S. citizens are encouraged to carry more than one means of payment (cash, debit cards, credit cards), and make sure to have enough cash on hand to cover emergencies and any unexpected delays.”

Be extra vigilant. “The State Department recommends you maintain a high level of security awareness and avoid political rallies and demonstrations as instances of unrest can occur,” the U.S. Embassy states. “Exercise caution and common sense: Avoid the areas of demonstrations, and if you find yourself too close to a demonstration, move in the opposite direction and seek shelter.”

What’s more, pickpockets and thieves will surely be aware that tourists have been advised of the necessity of having plentiful cash on hand. So there will be extra reason for tourists to be targeted for theft. It goes without saying you shouldn’t stroll around casually with all of your cash in your purse or back pocket. Stash the bulk of it in the hotel safe, and divide walking-around cash among your party—ideally, safely kept in a money belt or neck wallet—perhaps with some emergency bills in the sole of your shoe. Don’t make it easy for pickpockets to rip you off.

Expect long lines and possible delays. There have already been huge lines at ATMs and supermarkets, with worried shoppers stocking up on essentials in the same way that Americans hoard milk and bread when a big snowstorm is in the forecast. There has also been plenty of speculation that strikes, demonstrations, and a squeeze on fuel could cause travel disruptions within Greece. So far, this has only amounted to speculation, and ferries, gas stations, and such have not been affected.

Tour operators are reporting (mostly) business as usual. “We were in touch with our hotel and our tour director earlier today, and both report that daily life is going on normally,” Tim Armstrong, a spokesman for the Tauck tour company, which had a group on a cruise just finishing up a three-night stay in Athens, said on Monday, according to the (Canada) Globe and Mail.

Likewise, Greek tourism officials maintain that the current events will have no impact on foreign visitors. “The tourists who are already here and those who are planning to come, will not be affected in any way by the events and will continue to enjoy their holiday in Greece with absolutely no problem,” said Elena Kountoura, Greece’s minister for tourism, according to the Independent. “It should be also noted that there is ample availability of both fuel and all products and services that ensure a smooth and fun stay for the visitors in every city, region and the islands.”

At least some of this seems like overstatement, considering that tourists and locals alike have already been affected by long lines. Credit and debit cards are still being accepted by most hotels and other businesses, but the fact that some are only accepting cash as payment is obviously another way that travelers are being affected.

Travel insurance probably won’t cover you if you cancel. If you’ve booked a vacation to Greece and purchased travel insurance for the trip, it may be time to look at the fine print. Most policies will reimburse a cancelled trip if there’s been a death in the immediate family, or if there’s been a natural disaster, terrorist attack, or large-scale civil unrest. But nothing that’s happening in Greece right now qualifies as a standard reimbursable situation.

“If you do cancel your trip it will be subject to the terms of the deal, and you stand to lose money,” one UK travel agent explained to the Guardian. Unless you’ve paid extra for a “cancel for any reason” upgrade to the insurance policy, in all likelihood your travel insurance would not cover you if you decide to cancel a trip to Greece right now.

Read next: What the Turmoil in Greece Means for Your Money

TIME Smartphones

Here’s How Many Americans Sleep With Their Smartphones

Apple Unveils iPhone 6
Justin Sullivan—Getty Images

Smartphone reliance is growing

Nearly three-quarters of Americans (71%) who own smartphones sleep with them — either by putting their phone on a nightstand, in their bed, or, for 3% of people, holding it in their hands.

A new mobile consumer report from Bank of America found that not only do Americans sleep with their smartphones, but the devices are also the first thing on people’s minds when they wake up: 35% of respondents said their first thought in the morning is about their smartphone; 10% said it was for their significant other.

The new report underscores an increasing trend of smartphone reliance among owners of the device, especially Millennials.

Throughout the day, more than half of Americans, about 57%, say they use their phone at least once an hour. In New York, that statistic jumps to 96%. In California, it’s 88%.

This constant interaction with smartphones means that Americans are increasingly using their phones for banking. More than half of the survey’s respondents said they use either an app, or a web browser as their primary form of banking. In California, 57% of residents are actively using a mobile banking app, mainly for banking notifications and alerts, checking balances, and mobile check deposits. By comparison, 53% of New Yorkers and Texans actively use banking apps.

Not crazy about smartphones? You might want to move to Denver. The city’s respondents are the most likely to survive without their smartphones: 49% said they would choose phone calls if they could only keep one feature of their phones (that’s 10% above the national average); and 27% of Denver respondents said they could refrain from using their phones indefinitely.

But even in Denver, the trend is inescapable: 63% of Denver residents sleep with their phones.

The Bank of America study surveyed 1,000 people who own smartphones and have banking relationships across the United States, plus 300 people in key markets such as New York, Denver, and California.

MONEY Banking

Think Twice Before Linking Your Bank Account to an App

Naver Corp.'s Line Mobile Apps As SoftBank Said to Seek Stake
Bloomberg/Getty Images

Consumer protections limit your liability in case of fraud -- but you need to act quickly.

Consumers routinely share their online banking passwords with third-party apps that help with everything from budgeting to tax preparation. Apparently banks would like this to stop. JPMorgan Chase posted this notice on its website in April:

“If you give out your chase.com User ID and Password, you are putting your money at risk,” says a page titled Guard Your ID and Password. “Some websites and software offer tools to help you with budgeting, managing accounts, investing, or even doing your taxes. But if you’re giving them your chase.com User ID and Password, you could be responsible for money you might lose as a result.”

That’s no small threat. In other words, if one of those third parties gets hacked and a criminal takes your money, you could lose it all.

The page goes on to advise consumers who’ve already shared their passwords to immediately change them — and of course, not give the new login information to the third party.

The warning is broad, but popular sites like Mint.com, which perform item-by-item analysis of consumers’ accounts, stand to lose the most if consumers heed the warning. So I asked Mint what it thought about Chase’s post.

Holly Perez, a Mint spokeswoman, said the warning was not really new. Several banks have language in their user agreements telling consumers not to share login information with third parties. She’s right. Here is language from Capital One’s agreement:

“Sharing your Capital One access credentials (with third parties) may represent a breach by you of applicable [agreement or terms and conditions),” it reads. “One of the reasons that Capital One prohibits this type of sharing is that we may not have any information regarding the use of or security environment around this sensitive information at any third party. If you choose to share account access information with a third party, Capital One is not liable for any resulting damages or losses.”

Chase’s new posting is probably the result of the recent increase in high-profile hacks, Perez speculated.

Trish Wexler, a senior vice president at Chase, agreed, and pointed out that similar language was present in the Chase user agreement long before the April post: “If you disclose your Card numbers, account numbers, PINs, User IDs, and/or Passwords to any person(s) or entity, you assume all risks and losses associated with such disclosure.”

Wexler said the post was not aimed at any particular third-party service, and she did not know of any incident which led to the post. It was published out of a desire to put that provision of the user agreement into plain language. She also said the post should not be interpreted as Chase telling consumers not to use any specific service, such as Mint.

“Our job is to make sure consumers can make their own choices based on all the available information,” she said. “Clearly customers want to be able to use services like this. They need to understand there are risks associated with giving out their user name and password, be it to a third-party service or a neighbor.”

What the Law Has to Say

Those risks aren’t completely clear, however. Federal banking regulations concerning unauthorized electronic funds transfers are very consumer-friendly. Consumer liability for losses is capped at $50 or $500, depending on how quickly a consumer reports fraud once it is discovered. Even negligence doesn’t increase the consumer’s liability, banking regulators have said. For example, even writing a PIN code on a debit card doesn’t increase the consumers’ liability if the card is stolen and used to make withdrawals.

“Negligence by the consumer cannot be used as the basis for imposing greater liability than is permissible,” the rules say. “Thus, consumer behavior that may constitute negligence under state law…does not affect the consumer’s liability for unauthorized transfers.”

The rules go on to say that banks cannot impose additional liability on consumers.

“The extent of the consumer’s liability is determined solely by the consumer’s promptness in reporting the loss or theft of an access device. Similarly, no agreement between the consumer and an institution may impose greater liability on the consumer for an unauthorized transfer than the limits provided in Regulation E.”

Chi Chi Wu, a banking regulation expert with the National Consumer Law Center, said consumers victimized by theft of credentials from a third-party site would enjoy the same protections as a consumer who divulged their passwords to a hacker.

“The same principles apply,” she said.

Of course writing a PIN code — or falling for a phishing email — is not a direct parallel to intentionally sharing login credentials with a third-party site. Until there is a high-profile test case, it’s hard to say what might happen. For any consumer hit by such a crime, there’s certain to be a big hassle, even if a bank ultimately refunds their money – out of a legal obligation, or free will.

The bottom line for consumers: You don’t want to be that test case. Be extremely judicious when handing out your banking credentials. If you do, be vigilant about what happens inside your bank account. Roughly speaking, you only have two days from the time a fraud appears on your regular statement to report it and be protected by the $50 liability limit. Otherwise, the limit is $500. And if you wait 60 days, the limit is … unlimited. So your real worry should be spotting and reporting fraud promptly.

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