Bank Fee Survey Mid-2010 – What’s Up (Or Down) With Bank Fees?

With savings account and money market rates down and uncertainty in the banking industry, consumers get some good news about affordable checking accounts.
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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 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 &nbsp 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.

Richard Barrington, a Senior Financial Analyst at MoneyRates, brings over three decades of financial services expertise to the table. His insightful analyses and commentary have made him a sought-after voice in media, with appearances on Fox Business News, NPR, and quotes in major publications like The Wall Street Journal and The New York Times. His proficiency is further solidified by the prestigious Chartered Financial Analyst (CFA) designation, highlighting Richard’s depth of knowledge and commitment to financial excellence.