Checking costs rise; only 28% are free

  • Los Angeles Times
  • Wednesday, August 27, 2014 3:32pm
  • Business

The cost of consumer checking accounts at U.S. banks and thrifts hit new highs during the first six months this year, according to the latest survey of 100 banks by MoneyRates.com.

A twice-yearly report from the personal finance website said average monthly maintenance fees and overdraft protection fees rose. The survey, released Tuesday, also recorded increases in the minimum deposits required to open an account and to qualify for a waiver of the monthly fees.

The availability of free checking accounts, defined as those with no monthly maintenance fees, continued to decline. The percentage of free accounts dropped to 28 percent, down from 36.6 percent at the end of 2012 and the lowest share of all checking accounts since the survey began in 2009.

The average monthly maintenance fee rose by 15 cents to $12.69 during the first six months of 2014, meaning it costs the average consumer more than $150 a year just to keep a checking account open, MoneyRates said.

The California company surveyed the 50 largest banks that offer retail consumer deposit services, along with a sampling of 25 additional banks with $5 billion to $10 billion in deposits and 25 banks under $5 billion in deposits.

The survey did not address accounts at credit unions, which consumer advocates say are often a good alternative for cost-conscious consumers. Michael Moebs, a banking cost consultant in Illinois, said nearly two-thirds of credit union checking accounts do not charge monthly fees.

Not surprisingly, large banks with extensive branch systems to maintain generally have higher checking fees. Institutions operating over the Internet are more likely to have free checking, said financial analyst Richard Barrington, a MoneyRates spokesman.

The survey showed that 58 percent of Internet checking accounts are free of maintenance fees, compared to just 25 percent of traditional checking accounts. That’s down from a year ago, when nearly 79 percent of Internet bank checking accounts were free and 28 percent of traditional accounts had no maintenance charges.

Barrington said he has been surprised by the “inertia” that keeps many consumers from shopping around for cheaper deals at institutions where checking accounts meet their needs – fee-free accounts for students and seniors, for example, or accounts that are free when bundled with other financial services.

He also recommended that consumers opt out of overdraft protection, saying just five overdrafts typically would cost more than the average maintenance fees for an entire year.

“The first time a purchase is declined can be a shock, but consumers adapt quickly to managing their money more responsibly,” Barrington said.

Here are some details from the survey:

-Overdraft fees were up by 45 cents per transaction, to an average of $32.48.

-The average minimum amount required to open an account rose $6.74 to $400.45.

-The average minimum balance to qualify for a waiver of the monthly maintenance fee rose by $724.69, to $5,440.

-The fee banks charge their own customers for using an out-of-network ATM rose by 7 cents, to an average of $1.52.

-The only area in which fees slipped was in the surcharge banks impose on noncustomers for using their ATMs. This fee fell by 4 cents, to an average of $2.51.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.