Checking Account/ATM Fee Survey: 1st Half 2021

Monthly maintenance fees on checking accounts rose to a record high in the latest MoneyRates.com survey. Here's how to save on these and other checking account fees.
By Richard Barrington

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A strange thing happened to checking account fees over the past six months — they went down.

Generally speaking, checking account fees have been rising steadily over the past ten years, so it’s unusual to see that those fees declined across the board in the latest MoneyRates Checking Account fee survey. Monthly maintenance fees, overdraft fees, ATM fees — all are lower than they were six months ago.

Seeing fees go a little lower is a welcome break for consumers. However, individuals can make those fees go a lot lower — or even vanish — with some smart banking.

Trends in checking account fees 2021

Like most prices, checking account fees have risen over time. Occasionally there will be an isolated exception where one type of fee will temporarily take a step back, but for the most part the three major fees tracked by this survey (monthly maintenance fees, overdraft fees and ATM fees) have headed higher consistently.

So what the latest survey found is very rare. Each category of fee has taken a step back since the last survey was done six months ago. Below are details on the latest trends for each type of checking account fee.

Monthly maintenance fees

Checking accounts generally come with a list of fees, but most only apply to certain kinds of activity. The monthly maintenance fee, though, is especially significant because it applies month-in and month-out, no matter how you use the account.

The new Checking Account Fee survey finds that the average monthly maintenance fee is now $13.95 per month. This is 3.1% lower than it was in the previous survey, from last August.

To put today’s fees into a longer-term context, five years ago the average monthly maintenance fee was $13.29.

That means these fees have risen by a total of 5% over the past five years. That’s actually not bad, since it’s only about half the rate of inflation in general over that period.

Another positive trend in maintenance fees over the past six months is that fewer banks are charging them. Most checking accounts do have monthly maintenance fees, but smart shoppers have always been able to find accounts that don’t. Your chances of getting a free checking account have improved recently.

More than 37% of checking accounts now have no monthly maintenance fees. That’s up from 35.7% six months ago.

While the majority of checking accounts still charge a monthly fee, free checking is becoming increasingly common. This may be due to the online checking’s influence.

Online checking accounts are more than twice as likely as traditional branch-based accounts to offer free checking. As online banking has become more common, it leads directly to more free checking accounts. The rise in free checking may also reflect the competitive pressure lower-cost online banking has put on traditional banking.

Even with monthly maintenance fees dropping a little over the past six months, they still add up to an average yearly cost of $167.40. So, while free checking accounts are still the exception to the norm, they are well worth finding.

Overdraft fees

Overdraft fees also got a little cheaper over the past six months. The average is now $30.82 per occurrence, down 4% since the last survey.

These fees have actually declined over the past five years. However, they are still no bargain.

Overdraft fees of $30.82 per occurrence are hefty enough on their own, but unfortunately, they can come in bunches. If you create more than one transaction while your account is overdrafted, you’re likely to find yourself paying an overdraft fee for each of those transactions.

ATM fees

Banks typically don’t charge their customers for using an ATM operated by the bank, or one that’s part of a network to which the bank belongs.

Use an out-of-network ATM though, and you’ll probably pay twice. Banks generally charge their customers for using out-of-network ATMs, and you’ll also pay a fee to the operator of the machine.

Combined, these two types of fees add up to an average of $4.55. That’s down 1.7% from the previous survey.

Although $4.55 may not sound like a big deal, it’s the type of fee that can really add up over the course of a year if you’re a regular ATM user.

Methodology: How MoneyRates.com tracks checking account trends

How representative of the banking industry are these trends? MoneyRates constructs its study so that it includes all segments of the banking industry.

The MoneyRates.com Checking Account Fee Survey is conducted every six months. It is based on fee information from over 300 checking accounts offered by the 100 financial institutions that make up the MoneyRates Index.

The MoneyRates Index is made up of 100 banks which represent a cross-section of the industry. This includes the 50 largest retail deposit institutions in the United States, plus 25 medium-sized banks and 25 small banks.

Free checking — How to avoid checking account fees

It’s always a positive for consumers when bank fees go down. However, a drop of a few percentage points in bank fees isn’t anywhere near the best deal banks are offering customers.

The real deal is free checking. You can have a checking account and not pay a dime for it. It all depends on the choices you make. This starts with your choice of account type.

Online accounts are much more likely than traditional accounts to offer free checking. We find that 70.7% of online checking accounts have no monthly maintenance fee, compared with 32.4% of traditional accounts.

On top of that, online accounts can help you avoid overdraft fees. Being able to access transaction and balance information anytime, anywhere can allow you to keep your checking account records more up-to-date. That information could stop you from incurring overdraft fees by spending money you don’t have.

Even though online banks don’t have physical locations, they can help you cut down on ATM fees. None of the online accounts in this survey charged their customers for using an out-of-network ATM.

Many banks offering online accounts belong to extensive ATM networks so you can also avoid the fee charged by the machine operators. Other online accounts reimburse their customers if they incur those fees.

The pandemic has led people to conduct more and more of their personal business online anyway. Why not bank that way permanently, and take advantage of the cost savings associated with online banking?

Where Are the Best Checking Account Deals?

As noted above, online banking is probably the best way to minimize checking account fees.

Another possibility? Think small.

MoneyRates.com finds a variety of fee advantages associated with smaller banks. For the purposes of this survey, MoneyRates.com classifies a small bank as one with less than less than $5 billion in total customer deposits.

Nearly half (44.3%) of checking accounts offered by small banks in this survey have no monthly maintenance fee. That represents a greater likelihood of finding free checking than at large banks, where only 31.33% of checking accounts report no monthly fee.

Among accounts charging a monthly fee, those fees are significantly lower at small banks. The average monthly maintenance fee on a small bank checking account is $10.95, compared to $16.35 at large banks.

ATM fees from small banks are typically cheaper as well. Combining the bank out-of-network fee with the fee charged to non-customers at a bank’s machines, the small bank average ATM fee is $3.82, compared with $4.88 at large banks.

The one exception to the small bank fee advantage was overdraft fees. The average of these at small banks was $31.86, compared with $30.84 at large banks. However, that fee differential is only meaningful if you regularly overdraft your account.

The fee advantages offered by online banking and smaller banks are general trends that can help you find a better deal on your checking account. You can find more specific information on the MoneyRates.com Checking Accounts page, which regularly highlights good checking account deals.

Next Steps: Start Saving Money On Your Checking Account Today

Now that you know the trends in checking account fees, how can you use them to your advantage? Any or all of the steps listed below are things you could do right away to eliminate sloppy banking habits and start saving money — possibly hundreds of dollars a year.

  1. Give online banking a try.

    The cost advantages of online banking are detailed above. What better time to make the switch than during a pandemic?

  2. Manage your balance to qualify for a fee waiver.

    One way around paying a monthly maintenance fee is to keep a large enough balance in your account to qualify for a fee waiver. Most banks will waive your monthly fee if your balance exceeds a certain amount. While the average amount required to qualify for a fee waiver might be out of reach of most customers at just over $24,000, at some banks it’s as low as $100.

  3. Match your bank with your ATM habits.

    Do you regularly get cash from an ATM? If so, you need a bank with an extensive ATM network in places you visit frequently. An alternative would be a bank that reimburses customers for out-of-network ATM fees.

  4. Try kicking the cash habit.

    The use of cash has been on the decline in recent years anyway, and the pandemic has made cash even more out of favor. A debit card may be a cheaper and more sanitary alternative to regularly drawing cash out of an ATM.

  5. Use account information better.

    Online statements make it much easier to keep track of your checking account balance. You still need to match online information with your own records to get the full picture, but it has never been easier to stay up to date and avoid overdrafts.

  6. Comparison shop – a better deal might be just a few clicks away.

    Are you still paying a monthly checking account fee? Why would you do that when there are plenty of free checking accounts? Visiting the MoneyRates.com checking account page could be the first step towards saving money.

The latest MoneyRates.com Checking Account fee survey finds that a drop in average bank fees might save consumers a few bucks. That’s nice, but the real savings could come from a simple change in the bank you use.

Frequently Asked Questions

Q: I added up my ATM fees on my last monthly bank statement, and I was shocked to find that I paid more than $20 in fees. How can I find a bank that won’t take such a big bite out of my checking account?

A: You should look for a checking account with lower ATM fees, but chances are that’s only part of the answer.

There are two sources of ATM fees: your bank, and the operator of the machine. You can address the first kind by looking for a checking account with low ATM fees. You should be able to find banks that charge nothing for ATM transactions within their own ATM network, and that leads to addressing the next kind of fee. If you frequently find yourself using an ATM outside of your bank’s network, then you will be paying a fee to the machine’s operator. This will be expensive enough if those are bank ATMs, but it will be even more expensive if you use ATMs in locations like convenience stores.

The answer, then, is to look for a bank that not only has low ATM fees, but which also has an extensive ATM network in your area. Then, get in the habit of using machines in that network.

Speaking of habits, you may also be making too many small ATM transactions. If you can avoid ATM fees by finding a checking account with no charge for in-network fees, then this doesn’t matter. Otherwise though, you may want to consolidate some of those transactions. A smaller number of larger transactions will reduce the percentage of your withdrawal that the ATM fee represents.

Q: What should I focus on when trying to compare bank fees?

A: It’s no accident that bank fee schedules can be confusing. Most banks don’t want to make it easy to do head-to-head cost comparisons, and of course, those fee schedules are always written so as to reserve the bank’s right to change their fees in the future. Still, here are three major categories of checking account fees to focus on:

  • Monthly maintenance fees. These are the most important fees because they occur automatically every month, but if you shop around, you should be able to find a free checking account in your area.
  • Overdraft fees. Comparing overdraft fees is useful, but what’s even better is opting out of overdraft programs altogether.
  • ATM fees. Don’t just look at the fees–look at a bank’s ATM locations so you can assess how often you’d incur a fee for having to use another bank’s machines.

Beyond that, there are several fees for specific things like wire transfers, and some banks are starting to charge for paper statements. If you have some banking history, it may be helpful to look at the type of fees you would have incurred in the past, based on your banking habits. For example, some people overdraft their accounts more often than others, some are heavier ATM users, etc. Also, some banks will waive certain fees if you maintain a balance above a certain threshold.

To sort this out, look at fees you’ve incurred recently, and see whether a potential new bank’s fee schedule would have been any easier on you, based on your usage patterns.

Q: What fees are most important? Doesn’t anybody have free checking anymore?

A: It might be easier to answer your second question first. When people refer to “free checking,” they usually mean an account that has no monthly maintenance fee. That doesn’t mean the account won’t have various other fees, such as ATM fees and overdraft fees. Depending on how you use the account, those fees can be more significant than the monthly maintenance fees.

That leads into the first part of your question: Which fees are most important? Looking at some typical fee levels can help illustrate why the answer to that depends on your account habits.

According to the latest MoneyRates.com Checking Account Fee Survey, the average monthly maintenance fee among accounts that charge such fees is $12.08. The average fee for using an ATM outside of your own bank’s network is $1.28, and the average overdraft fee $29.83.

Lining these fees up side-by-side, the overdraft fee is clearly the largest, so does that means it is most important? This is where your usage of the account comes in.

An important thing to understand about these fees is that a monthly maintenance fee will be charged every month, no matter how you use the account, while overdraft fees and ATM fees can be avoided. So, all things being equal, a monthly maintenance fee should be the most important fee to compare when choosing a checking account.

However, if you habitually overdraft your account, then overdraft fees become more important. Similarly, if you travel a great deal and find you frequently use an ATM outside of your bank’s network, then you’ll want to pay more attention to ATM fees when choosing a checking account.

Ideally, though, you should try to avoid ATM and overdraft fees. When choosing a bank, look for one that has an ATM network that matches well with your regular areas of travel. As for overdraft fees, keeping up-to-date and accurate records should help you avoid overdrafts. Remember, you have the right to opt out of overdraft protection if you want to force yourself to develop good record-keeping habits.

Getting back to the monthly maintenance fee, the most recent MoneyRates fee survey found that just over one-third of all checking accounts have no monthly fees. Many other accounts will waive the fee if you maintain a specified minimum balance.

In summary, all fees should be taken into account when choosing a checking account, though with smart shopping and careful banking habits, you can avoid paying all forms of checking account fees.