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Beware “exit fees

Mar 18, 2010 | | Comments Comments Off

Dear Liz: My wife and I are rolling over our bank certificates of deposit to another investment company to consolidate our holdings. Two weeks before the CDs’ maturity date, we notified the bank and filed the necessary papers. The bank didn’t complete the rollover for two months and then withheld $50 for something it called a “Trustee to Trustee Transfer Fee.” What is this, and can the bank make this charge?

Answer: Such “exit fees” are a way for banks and brokerages to nip an ounce of extra flesh from departing customers. Many financial institutions charge them, but they often aren’t well disclosed and few investors know to ask about them. You’ll know better next time.

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Categories : Banking, Investing, Q&A