Bank Rates Soar High Followed by Decline in Free Checking Accounts

In the current market scenario, the fees for monthly maintenance of non-interest checking accounts have hit a remarkable rise of $5.48, which is a whopping 25% leap from the figures last year. The monthly fees for bank overdraft have also reached its peak high, with an average fee of $31.26 for Non-Sufficient Funds. The figures this year have also made a good jump from $30.83 bank rate last year. Further, the fees payable for using Out-of-Network ATM services have also risen dramatically. Now, ATM users have to pay $2.50, which is an unprecedented high of 4% from that of the last year. In addition to this, one has to pay another $1.57 to the bank, a tremendous hike of 11% over the rates last year.

With the bank fees soaring at a fast pace, Free Checking Accounts, the ones with no conditions for minimum balance or a fixed monthly fee, are rapidly declining. Talking about the hike in bank rates, followed by declining free checking accounts, Greg McBride, senior financial analyst, stated that this rising trend in bank rates is here to stay for a few years now. No way, it is going to change too soon, added Greg.

The study further reported that only a meager 35% of the top banking institutions in the United States were offering non-interest accounts for free, as of the figures available in November, 2012. This is indeed a massive drop from a record high of 76% in the year 2009 or even 45% in the 2011. This decline in free checking accounts has been attributed to the negative effect of rising bank rates in recent years. Greg further commented that if things are going to work like this, a day will come when there will be no banking institution left, offering checking accounts for free to customers.

So, how to avoid the brunt of rising bank rates? How to open a checking account with no fees, no minimum balance? Open a direct deposit account, suggests industry experts. Use ATMs only when it is most necessary, avoid fees in bank overdraft, and identify the root cause for the bank charging such fees, recommends the experts. On that basis, change your banking habits and financial transactions to avoid the heat of rising bank fees.