Consumers love to gripe about the scarcity of free checking and ever-increasing bank fees. But something funny happened in the second half of 2011 that belies the narrative of being nickel-and-dimed by the big banks: The availability of free checking, as well as minimum balance requirements and maintenance fees, actually inched down. It appears some banks blinked, abandoning fee hikes in the face of a backlash defined by protest movements like Occupy Wall Street and Bank Transfer Day.
A new survey of checking accounts at 100 large and medium-sized institutions conducted by MoneyRates.com found that roughly 39% of them have no monthly maintenance fees, a jump of about 4 percentage points from just six months earlier. Back in the relative good ol’ days of mid 2010, around 44% of checking accounts were free. But this recent trend, while a step in the right direction, doesn’t indicate a complete reversal.
For accounts that do charge maintenance fees, these amounts have inched down slightly, although they’re still high at an average of $11.28 per month, a drop of about 50 cents from mid-2011. For some perspective, that average was a relatively paltry $5.90 at the end of 2009.
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Minimum balance requirements to have those maintenance fees waived have come down more significantly since midyear, from $4,122.66 to $3,590.83. That’s still a lot of money to keep locked up earning little or no interest, though.
Ever since the CARD Act, debit interchange and overdraft legislation kicked in, crimping three of banks’ major moneymakers, financial institutions have been scrambling for ways to make up that revenue. Hiking fees across the board was proven unpopular when consumers rebelled against ill-fated attempts to implement debit card fees, so banks have gotten a little more creative.
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Analysts predicted that banks would start increasing prices for things like penalty fees, and they’re right: Overdraft fees crept up to an average of $29.23, according to MoneyRates. Research company Moebs $ervices came up with a similar figure. By its estimation, overdraft fees hit an average of $30 last year.
Banks are also adding or hiking fees for infrequently or irregularly used services. MoneyRates data shows that the average cost for out-of-network ATM use has gone up by 25 cents in the past six months alone. A recent article in the Orlando Sentinel points out that banks today now charge for wire transfers, paper statements and even, at some banks, for closing your account.
If you’re feeling besieged by fees, online banks seem to have the hang of this no-fee thing better than their brick-and-mortar counterparts (of course, these banks also operate with much lower overhead). According to MoneyRates’ research, around 53% of online banks offer free checking.