Customized Checking Accounts: More Features (and Fees) for You

Once upon a time, a checking account was a fairly simple product. You paid a fee to the bank for the privilege of writing checks against the money, or got the service for free if you maintained a hefty balance.

Then 20 years ago, free checking was introduced, and the accounts became a commodity banks used to get customers in the door for higher-profit services, like mortgages and personal loans.

But all that is changing in the new regulatory landscape. New rules on credit card practices and overdraft fees that go into effect this year are costing banks billions in revenue. Now banks are looking for ways to make that up, and checking accounts are a natural target.

Banks Look for Revenue in Checking Accounts

American Banker reports some banks are already having success with customized checking, products that let customers choose services they want with their accounts. Some of the services are free, while others come with fees. Bank executives see customization as a way to bring in revenue.

What does this mean for you?

The days of completely free checking may be numbered. Some banks have already announced an end to the product. For instance, TCF Financial Corp., which unveiled "totally free checking" 20 years ago, recently announced it would introduce a monthly maintenance fee.

Other banks are laying out special services, letting you choose the features to create a customized checking account.

Customized Checking Accounts: Choose Your Fee

Among the features banks are offering are:

• Identity theft monitoring. You pay a fee to get a service that promises to protect you from identity theft when you shop online.
• Interest on balances. You may need to maintain a minimum balance or pay a monthly fee to earn interest.
• Free access to out-of-network ATMs. This feature keeps you from getting nickel and dimed, particularly when you travel.
• Overdraft refunds. It works sort of like a get-out-of-jail-for-free card. You forgo an overdraft fee if you overdraw your account.
• Cash back on debit purchases. Banks earn a portion of the fees from retailers when you use your debit card. Rewards may require you to use your debit card for a certain number of transactions per month.
• Free cashier's checks and money orders. Technically, they may not be free. You may pay a fee for the checking account, and the free cashier's checks and money orders are thrown in as an "additional service."

More Choices in Checking Accounts

Banks will vary in how they offer these features. Some will be packaged into different product offerings and others offered from an a la carte menu. BBVA Compass in Birmingham, Ala., for instance, offers a core of free services, then lets customers choose two premium services for free and then add any additional services for a fee.

If the customization trend takes off, you'll have more choices, and it will probably be harder to make apples-to-apples comparisons between offerings at different banks. Think about what's important to you before you go shopping for a checking account, and then read the fine print behind the offerings before you sign up.