Bank fee survey mid-2010: What's Up (or Down) with Bank Fees?
Read the most recent survey of bank fees
While many industry observers have been forecasting the demise of free checking accounts as tighter regulations limit opportunities for bank profits, the latest data from the MoneyRates.com Bank Fee Survey finds that free checking is still plentiful, and that monthly maintenance fees have actually declined since the January 2010 Bank Fee Survey release.
However, some types of fees have increased, so consumers should keep an eye out for the best deals. Let's take a closer look at what the fees reveal--and what they mean for bank customers.
Checking Account Relief
The July 2010 results bring some much-needed good cheer for consumers in a turbulent time. In the wake of the financial crisis, depositors have had to deal with the possibility of banking system failure, bottom-of-the-barrel savings account, CD, and money market rates, and more recently, the prospect of rising fees for checking account and other services.
For the time being, some aspects of the bank fee environment seemed to have improved--or at least held steady--since the last survey. Here are some of the positive developments for consumers:
- Free checking remains widely available. In January 2010, 44.6% of checking accounts surveyed carried no monthly maintenance fees. In the July 2010 survey, that number was virtually unchanged, at 44.2%.
- Minimum balances have declined. Banks will often waive checking account fees if a certain minimum balance is maintained. The minimum balance required to avoid monthly maintenance fees fell between the January and July releases, as did the minimum balance required to open a checking account.
- Monthly service fees have declined. For those customers who are paying a monthly maintenance fee, there was a slight drop in the average fee, from $5.90 to $5.85.
Some Fees Still Rising... and How to Avoid Them
Despite a generally favorable outlook for checking account customers, some bank fees have risen. Take ATM fees outside your bank's network. If you use the ATM of a bank other than your own, it is likely to cost you more these days--an average of $2.14, up 13.8% from the $1.88 average found in January 2010. Overdraft fees have also risen, reaching an average of $29.26. This is up slightly from the January 2010 average of $28.81.
Still, given that both of the above are types of fees that consumers can readily avoid with planning, the latest Bank Fee Survey results holds more good news than bad news for today's banking customers.
About the Bank Fee Survey
The Bank Fee Survey is conducted semiannually and was commissioned by the New York State Banking Department. The survey focuses on banks doing business in New York state, but the banking landscape in New York includes some of the industry's leading names; with those banks represented, the survey sample is broad enough to paint a pretty accurate picture of banking trends across the nation.
The latest survey release comes at a pivotal point for the banking industry. Still more new regulations from financial reform legislation may cut into the profitability of banks, which many fear will lead to higher fees and less availability of services.
The July 2010 survey results suggest that this has not yet happened, but January 2011 results will be key to watch.