Bank fees are rising as financial institutions look for ways to increase noninterest revenue. Consumers are facing higher costs for services including overdrafts, monthly account maintenance, and ATM transactions, while minimum balance requirements for avoiding certain checking account fees are also increasing.
These changes can make the cost of maintaining a traditional bank account more significant, particularly for customers who cannot consistently maintain higher balances. Understanding checking account fees and the requirements for avoiding them can help consumers make more informed decisions about where they keep and manage their money.
Bankrate’s new study provides the data to back up what most of us already knew; banks are raising fees for overdrafts, for account maintenance, and for ATM use (both in-network and out-of-network) in an attempt to bolster revenues.
Minimum Balance Requirements Are Also Rising
Minimum balance requirements (generally in lieu of monthly maintenance charges) are up as well:
Mirroring their noninterest brethren, the average minimum to avoid fees on an interest checking account rose $511.22 to $3,883.40,” reports Claes Bell of Bankrate.com.
Consumers Look for Ways to Avoid Bank Fees
Bankrate also provides tips for those seeking to minimize banking-related expenses.
The increases identified by Bankrate demonstrate that consumers need to consider more than interest rates and account features when evaluating a banking relationship. Overdraft charges, ATM fees, monthly maintenance fees, and minimum balance requirements can all affect the actual cost of maintaining and using a checking account.
Higher minimum balances can be particularly important because customers who fall below the required threshold may face recurring monthly charges. As those requirements increase, consumers may need to keep substantially more money in an account simply to qualify for a fee waiver.
ATM usage can create additional costs, especially when customers use machines outside their financial institution’s network. Combined with overdraft and maintenance charges, these expenses can accumulate and make seemingly similar checking accounts significantly different in terms of overall cost.
Consumers seeking to minimize checking account fees should therefore understand the complete fee structure associated with an account and the conditions under which individual charges can be avoided. Comparing account requirements, maintaining qualifying balances when practical, and using in-network ATMs can all help reduce banking expenses. As financial institutions continue adjusting their fee structures in pursuit of additional revenue, the cost of everyday banking is becoming an increasingly important consideration when consumers select and use checking accounts.
Read full article: http://www.bankrate.com/finance/checking/7-key-checking-trends-for-the-coming-year-1.aspx
