Checking account fees are increasing as banks impose higher minimum balance requirements and raise charges for services such as ATM use and overdrafts. A Bankrate.com survey found that fewer than four in 10 non-interest-bearing checking accounts were completely free of fees or minimum balance requirements, a substantial decline from the levels seen just a few years earlier.
The rising cost of checking accounts is giving consumers more reason to compare financial institutions and consider alternatives. While traditional free checking is becoming less common, consumers may still be able to avoid monthly fees through direct deposit, careful account selection, or by choosing community banks and credit unions that offer lower-cost products and access to surcharge-free ATM and shared branch networks.
A recent Bankrate.com survey shows checking account fees and restrictions continue to increase, while the availability of truly free checking is becoming rarer. The average required minimum balance is now over $700, according to the survey.
According to Bankrate, only 39 percent of non-interest bearing checking accounts were free of any fees or minimum balance requirements, down from 45 percent last year and the peak of 76 percent in 2009. These statistics, as well as those from similar surveys, are causing consumers to look at their own situations more closely and critically.
The Bankrate survey also noted ATM fees continue to increase. The average fee charged by a bank to a non-customer using one of its ATMs was $2.50, up four percent year-over-year. It was the eighth straight year average ATM surcharge fees increased. Similarly, banks increased the amount they charged their own customers to use other banks’ ATMs to an average of $1.57 per transaction, and increased overdraft fees 1.4 percent to a record high of $31.46.
Still, consumers have choices when banking, and can make decisions based on their own preferences and specific financial needs. Free checking is attainable without tying up significant amounts of money by being creative, including using direct deposit or moving funds to a bank or credit union that offers free checking.
Additionally, consumers can single out banks and credit unions that offer surcharge-free ATMs, many of which are community banks and credit unions. And while these smaller financial institutions may appear to have a limited service area, many are affiliated with networks of shared branches throughout the United States. Some also have international coverage. This all means customers and members of these financial institutions can enjoy similar geographical coverage, and in some cases expanded coverage, than is available with large commercial banks.
As checking account fees rise, consumers should consider more than the advertised monthly maintenance charge when comparing accounts. Minimum balance requirements, overdraft fees, ATM surcharges, and charges for using another institution’s ATM can significantly increase the overall cost of maintaining and accessing a checking account.
The decline in completely free checking does not mean consumers are without alternatives. Some financial institutions waive monthly fees when customers use direct deposit or meet other account requirements. Community banks and credit unions may also offer accounts with fewer fees while participating in shared ATM and branch networks that provide customers with broader geographic access than the institution’s own physical locations might suggest.
These options demonstrate why consumers should evaluate checking accounts according to their individual banking habits. Someone who regularly uses ATMs may place greater value on a large surcharge-free network, while another consumer may benefit more from an account with no minimum balance requirement. As banks continue adjusting their pricing models, understanding the complete cost and accessibility of an account becomes increasingly important. Comparing checking account fees, requirements, ATM access, and available alternatives can help consumers select financial services that best match how they actually manage and access their money.