Tags: Bankrate | checking | account | fees

Bankrate: Checking Fees Reach Record Levels

By    |   Tuesday, 01 October 2013 08:04 AM

While banks have backed off on some checking fees, others fees have hit all-time highs, according to Bankrate.com's annual Checking Survey.

Most accountholders have fee-based checking accounts and the average monthly maintenance cost has risen to a record rate of $5.54 per month, Bankrate data shows.

But that's nothing compared to the cost of overdrafts, which Bankrate calls "the 800-pound gorilla of the fee world." Having jumped nearly $1 over the past year, the average charge is now $32.20.

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According to Moeb Services, overdraft fees are at a level where it's cheaper to get a $100 payday loan than to bounce a $100 check. On average, the loan will only cost $18, USA Today says Moeb notes.

Fees for using out-of-network ATMs have also risen to record levels, with the average withdrawal costing $4.13. This rate includes the combined amount users pay the ATM owners and their own banks. The increase stems from ATM owners demanding more money from non-customers.

The average fee your own bank will charge you for going out of network is actually down a few percentage points from last year, to $1.53, Bankrate notes.

And that's not the only cost that's declined. Average balance requirements to avoid the monthly fee on interest-bearing checking accounts fell from $6,117 to $5,802. With that, the average fee for not meeting the requirement also dropped a few cents from $14.75 to $14.64.

Bankrate says the data also provides good news about free checking — it may not be facing the certain death that many projected.

Between 2009 and 2012, there was a rapid decline in the percentage of free checking accounts, from 76 percent of checking accounts to 39 percent. The proportion has only by dropped 1 percent, suggesting that banks are not so readily eliminating the option anymore.

Bankrate believes financial institutions could be lightening up on customers because investors are not putting as much pressure on the banks. The FDIC reported that commercial banks and thrifts earned $42.2 billion in profits during the second quarter of 2013, a significant improvement from the year before.

However, Greg McBride, Bankrate's senior financial analyst, warns accountholders not to get too comfortable because further regulatory changes could spark another cascade of fee increases.

He also told CNBC, account holders should expect some costs increase regardless.

"Fees have been going up for years, even before the regulatory changes of the past couple years kicked the trend into overdrive," he said. "In tune with inflation, the cost of everything goes up."

Editor’s Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

Related Stories:

Bankrate: Free Checking Is More Expensive Than Ever

CNNMoney: Banks Are Shutting Down More Branches Than They Open

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While banks have backed off on some checking fees, others fees have hit all-time highs, according to Bankrate.com's annual Checking Survey.
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2013-04-01
Tuesday, 01 October 2013 08:04 AM
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