According to the results of a new personal finance survey, the number of banks offering free checking accounts continues to fall while bank fees grow at the same time.
According to a press release from Bankrate, a leading publisher and distributor of personal finance content on the Internet, the number of free checking accounts offered by U.S. banks continues to fall as other checking fees continue to rise. Bankrate.com's 15th annual checking survey shows that just 39% of non-interest checking accounts surveyed are available to customers free of charge, down from 45% last year and the peak of 76% back in 2009. Bankrate's checking survey also shows that 72% of Americans say they would consider switching checking account providers if their financial institution raised its fees on checking accounts, a number that is up from 64% just a year ago in March 2011. High-income households that earn $75,000 and up were shown to be the most likely to switch, at 82%. The growing percentages are important because high-income households are the customers that are considered as the most desirable by many financial institutions today.
In its survey, Bankrate examined 10 banks in each of 25 large U.S. markets, including one interest and one non-interest account at 247 different institutions that currently offer checking accounts. Of the results, Bankrate's senior financial analyst, Greg McBride, said "Checking accounts that are free on a standalone basis continue to diminish. But a free checking account is still within reach of the majority of Americans, whether by getting the fee waived through direct deposit or moving to a bank or credit union that still offers free checking, and consumers that practice good financial habits should rarely, if ever incur ATM and overdraft fees."
The survey found that of the 39% of non-interest checking accounts that were free, an additional 56% will waive the monthly fees if the account holder met certain conditions like direct deposits, the most common fee waiver condition cited. Of the free interest bearing checking accounts, it was found that 95% were free if the accountholder met certain conditions like maintaining a specific balance in a checking account or in other accounts at the same bank. Bankrate also discovered that the average monthly service fee on non-interest checking accounts was up 25% from last year, and the average balance requirement to avoid a fee is up 23% from the previous record that was set last year at $723. The average monthly service fee on interest bearing checking accounts was up 4% from last year and avoiding the fee now requires an average balance of $6,117, a number that is 9% higher than the previous record that was set just last year.