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Bank fees rise again

A new survey shows that small banks are much more likely than big banks to offer free checking accounts.

By MSN Money Partner Aug 14, 2012 10:30AM

This post comes from Richard Barrington at partner site on MSN MoneyNearly any way you slice it, checking accounts became a little more expensive in the first half of 2012.


Image: bank ATM (© Image Source/Corbis/Corbis)That's the principal finding of the latest Bank Fees Survey, a semiannual study that examines banking costs across the country to reveal trends in checking account and ATM charges. The latest data, which collected in July, suggest that the fee environment worsened for bank customers in virtually every way possible in the first half of the year.


However, the results also indicate that consumers still have several options for combating these costs. The following are some notable trends in bank fees -- and what consumers can do about them.


Checking fees rise across the board

Compared with the end-of-year 2011 Bank Fees Survey, average checking account fees rose in every major category tracked:

  • Minimum required to open an account. The average amount required to open a checking account was $408.76 in this survey, up from $391.41 in the previous one. The higher this minimum becomes, the more poorer customers may be forced to go unbanked.
  • Monthly service fees. Among banks that charge a monthly fee, the average cost was $12.08, up from $11.28. At a total of nearly $145 per year, these monthly maintenance fees can take a serious bite out of your account balance.
  • Minimum balance for fee waiver. Banks will often waive the monthly fee for customers with more on deposit, but the amount you have to keep in your account to get this waiver is going up. The data show an average of $4,446.57 to get a monthly fee waived, up from $3,590.83.
  • Overdraft fees. Overdraft fees jumped to an average of $29.83, up from $29.23.
  • Percentage of accounts offering free checking. Contrary to many reports, free checking is not dead, but it is becoming more scarce. Only 35.3% of the accounts surveyed were free of a monthly maintenance fee, down from 38.8%.
  • ATM fees. ATM fees also increased, both for bank customers using out-of-network machines and for non-customers using a bank's ATM.

Previous surveys have tended to show more of a mixed bag, with some fees rising and others falling. But the latest survey shows a comprehensive trend toward checking accounts becoming more expensive. (Post continues below video.)

Differences by size and type of bank

While the trend toward higher fees seems decisive, it is by no means universal. The average fees in the survey varied widely among different sizes and types of banks.


The average monthly maintenance fee was $13.88 at large banks (those with more than $25 billion in deposits) while it was only $9.87 at small banks (those with less than $5 billion in deposits). At medium-sized banks, the average monthly maintenance fee fit in between at $11.17. The average minimums to open an account and to qualify for a fee waiver were also higher among the large banks surveyed.


Results indicate that small banks are much more likely to offer free checking, too. There was no monthly maintenance fee for 45.8% of the accounts at small banks in the survey, whereas only 21% of the accounts at large banks were free of those fees.

Fee structures also differed greatly between primarily online banks and traditional branch-based institutions. Two-thirds of online checking accounts were free of monthly maintenance fees, compared with just 34% of those offered by traditional banks. The online banks that do charge monthly fees also tended to charge lower amounts than traditional banks, and their average account minimums, overdraft fees and ATM fees were lower too.

How to beat rising bank fees

Here are four tips to help you avoid the jump in charges:

  • Shop around. There is huge variation in bank fees, so shopping around can make a big difference. More than a third of checking accounts still do not charge a monthly maintenance fee, which can save you hundreds of dollars each year.
  • Consider an online bank. Given the clear cost advantage of online banks in the survey, switching to one may offer much needed relief if you are fed up with fees.
  • Think small. If you don't want to bank online, you may want to focus on smaller banks, since they offered several price advantages over their larger counterparts in this survey.
  • Match your needs with a bank's fees. When comparing banks, consider your banking habits. For example, if you have a tendency to overdraw your account, the size of overdraft fees may matter more than monthly maintenance fees.

While this survey suggests a clear pattern toward rising fees, you can still buck this trend by doing your research. Comparing fee disclosures takes some work, but when it leads to saving month after month, the effort is likely to prove worth it.


More from and MSN Money:

Aug 14, 2012 3:06PM

The author left out the most obvious and simple way to avoid Big Bank GREED.  My Wife and I have 6 credit union accounts (4 personal, 2 business) at 2 different credit unions.


Total fees paid in 2011 for all 6 accounts?  ZERO.  Minimum balance to open a Checking account?  ZERO (Savings Account required). Minimum balance to open a savings account?  Five Dollars. Minimum balance for fee wavier?  NO FEES to need a waiver for.


Oh, wait.  The author must be paid/funded by big banks to write this because NO WHERE is credit union mentioned.  


DUMP YOUR BANK.  You don't need them and they certainly don't want you, unless your net worth is mid 6 figures or higher.  They have to make enough money off you in fees and on your money to pay out BILLIONS in bonuses to their top FAT PIGS each year.

Aug 14, 2012 2:42PM

That is one form of high jacking a customer. Keep slapping fee's on customers money the bank  that lends out at high interest rates on your money.  I'm getting fed up with my bank! Now they want me to change how my pay check is directly deposisted? Really???


Ok Mr Big coperate bank your asking for it. Pretty soon more people are heading to local banks or stuffing money in coffee can's or under the bed. Oh and you want me to set up automatic bill pay? Why?  Wake up, not every company is on board with this!  Enough is enough!!!

Aug 14, 2012 4:36PM

cu is the way to go...that has been my bank for 28 yrs....

no fees, better interest rates for your accounts as well as for loans...

banks will never learn that they are not the "best" anymore...

Aug 14, 2012 5:03PM
more fee, bigger bonuses for CEO is that so hard to figure
Aug 14, 2012 8:20PM
credit union ,no high pay for dead beat ceo.most are nonprofit,so they dont have to nickle and dime you to death.
Aug 14, 2012 4:15PM
If the bank charges anything for "service"  my money finds a new home where it is appreciated !!!    So far TD Bank is doing a great job keeping me happy ..... not like wells fargo who wanted fees for not having direct deposit  or too little money in the account ( worst bank I ever dealt with in 20+ yrs)
Aug 14, 2012 6:02PM
I live in Central Texas and my bank is called First Victoria. I don't pay a monthly fee for anything. I have declined the $500 overdraft. I don't even pay for new checks to be made, this is all free. The only thing I pay is when I use another bank's ATM or if I get any bank certified checks. I don't understand why people pay for a monthly maintenance fee on their account.
Aug 14, 2012 4:32PM
Common sense and shop around.  We have no bank charges and make $300.00 a year on one credit card and  about  $150.00 on the other. Never a charge and we use this money to pay off our credit cards in full each month.  Common sense and shop around.
Aug 14, 2012 3:48PM

For all you B of A people if you want to get a living will document notarized  and the words "being of sound mind" is on your document they say it's a state law that they cannot notarize the document with that on it. I talked to the State of AZ and they said there is no such law and they should not be reading the documents. So B of A is in violation of a state law to save $5. More to come.

Aug 14, 2012 7:50PM

not for me. I do not let the banks rip me off. there are other alternatives that actualy do not affect credit in any way. to those of you being riped off by banks it is your own fault.

Aug 14, 2012 5:17PM
...and sure enough, some golddigger has to spam the comment section.
Aug 17, 2012 2:08PM
F  all banks ~ they are thieves and should be buried!

Aug 14, 2012 5:18PM
Excuse me - make that golddigger(S).
Aug 14, 2012 7:46PM
Re: "life is so lonely." If life is so lonely get off the computer and go out!!!!
Aug 14, 2012 5:58PM
What honest customers are really paying for here are the people who purchased a home and then walked away from their mortgage when home values declined.  Just like that, they decided to walk away and not honor the contract that they signed with the bank.  Many of these people still had their jobs with same income as when they signed the mortgage.  They strategically walked away.   But instead of going after them individually and garnishing their wages, banks are looking for ways to force EVERYONE  to absorb the cost of these massive mortgage defaults. 
Aug 14, 2012 2:55PM
banks are there to make a profit not make people happy.
Aug 15, 2012 12:52PM
Aug 14, 2012 6:49PM
You know what is so bothersome to me is people just have to blog thumbs down on constructive help concerning banks and fees. Do any of us think banks are solely in business to cater to us all and be nonprofitable? Cases in point I have a chase account that if I keep a minumum of three hundred dollars in the account, no monthly fee. I have a wells fargo account that if i keep a thousand in the account there is no monthly fee. My major bank is B of A where I have a checking and savings account. If I keep twenty five hundred in combined accounts and one auto deposit a month I get free checking, bill pay, paperless statements and interest on savings. Please walk into any B of A, ask to speak with a banker and have them explain what account or accounts they offer to give you free services. You may be quite surprised.
Aug 14, 2012 4:31PM
Banks have a right to make a profit.  Don't like it?  You're free to leave and go to a communist country.

Although, 4 more years of Obama, and you might not have to.
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