Citi is raising the monthly fee on its basic checking account.

The new fee will be $10, up 25 percent from the previous $8.

At the same time, the bank said Friday that it will waive fees and offer bigger rewards if customers sign up for more services. The changes reflect a broader industry push to deepen relationships with customers and capture more of their business.

For example, Citi also said it will no longer give rewards points for debit card purchases. But customers will be able to earn more points each month by opening a Citi savings account or setting up a feature that automatically transfers money into a savings account.

Customers will also be able to avoid the monthly fee if they maintain a balance of at least $1,500 or sign up for direct deposit and online bill pay.

Currently, the monthly fee can be waived if customers make at least five transactions of any type each month. Transactions can include direct deposits, ATM transactions checks, debit transactions and online bill payments.

The monthly fee on a premium account will remain $20. But the minimum balance required to waive that fee will rise to $15,000, up from $6,000. The minimum balance can be spread across other Citi accounts such as credit cards, mortgages and investments.

The changes take effect in December; customers will start getting notifications later this month.

Steve Troutner, who heads banking products for Citi's retail arm, said the new terms are a response to feedback from customers, who said they wanted simpler ways to avoid fees.

Troutner also noted that Citi is expanding its rewards program as other banks are scaling back on the perk. For example, basic checking account customers will be able to earn gift cards of up to $50 a year, compared with the current $35.

Banks for the past year have been retooling the terms on their checking accounts to adjust to new limits on traditional revenue streams.

Starting next month, for example, a regulation will cap the fees banks can collect from merchants whenever customers make debit card purchases. These merchant fees totaled an estimated $19.7 billion in 2009, according to the Nilson Report, which tracks the payments industry.

Another rule last summer prohibits banks from automatically enrolling customers in overdraft programs, which are another lucrative source of fees.

The result is that banks have been scaling back perks and imposing new fees. In the past year alone, major banks including Chase, Wells Fargo and PNC Bank have ended or limited their rewards program. Chase and Wells Fargo are also testing $3 monthly fees for debit cards in select areas.

Based on surveys of its customers, Citi said Friday that it would not impose such monthly fees for debit cards.