Question of the Day: What’s Happening with Checking Fees? Hint: They Are Not Going Down.
- Out of network ATM fees and Overdraft Fees are surging:
The average fee for using an out-of-network ATM climbed 5% the past year to a new high of $4.35 per transaction, according to a survey released Monday by Bankrate.com. Overdraft fees also surged, rising on average the past 12 months to $32.74. That’s the 16th consecutive record high, the firm said.
- Free checking accounts still hard to find with only 38% of banks offering them:
The largest U.S. banks all offered free checking with no strings attached until 2009, when the share of all non-interest checking accounts that were free peaked at 76%, according to Bankrate. It’s now at 38%; that’s unchanged from last year and only slightly lower than 39% in 2012. Even so, consumers looking for checking accounts without monthly fees have plenty of options. Many credit unions, smaller community banks and online banks offer no-strings checking accounts.
- Still savvy consumers have opportunity to save on their checking accounts. How?
Use your bank’s website to find fee-free ATMs or, if available, get cash back at the register when using a debit card to shop. Avoiding overdrafts is a matter of keeping tabs on your available checking account balance, something that’s easier than ever with mobile banking apps. You can also sign up for email or text alerts if your balance gets below a certain level.
- Why are these rates increasing? From MarketWatch:
Stricter regulation has forced many banks to reduce the number of checking account charges, but new research shows the fees that do remain have reached record highs.
Have students brainstorm tactics they can utilize to keep their checking fees to a minimum.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.