Free checking accounts become a thing of the past while ATM fees rise

The banks have increased the ATM surcharges by $2.50 which is the highest increase recorded over the last eight years. Banks, in recent times, have also increased the fees for consumers using a competitor’s ATM to withdraw cash. The increase is of $1.57 or 11 percent as compared to the current fees. Therefore, customers will now have to pay $4.07 per transaction at a competitor’s ATM, which is  record high of 7 percent.

Currently all banks allow their customers to use ATM without levying any special charges, but make up for it by charging them transaction charges when they use the ATMs set up by their competitors. However, most customers are now using only in-house ATMs which is causing many banks to lose out on their revenue. In order to make up for these losses, banks have increased the surcharges and the transaction fees when customers use a competitor’s ATM.

The bad news for customers, however, does not cease to end with this move. It has also been revealed that the number of free checking accounts offered by banks to consumers has fallen to a meager 39 percent as compared to the 45 percent last year and the 76 percent when free checking accounts were at their peak in 2009. A senior financial analyst, Greg McBride says that banks have lost out on a lot of revenue in recent times because of the new financial regulations that have come into play. Two of the main regulations brought into implementation by the Federal Reserve which curbs the overdraft charges and swipe charges, has caused loss of revenue in terms of billions of dollars. Therefore, financial institutions are coming up with newer means to make up for their loss.

Before the Federal Reserve brought in the regulations that put a clamp on the revenue banks were making from swipe fees and overdraft charges, free checking accounts were are rage since banks could make up for it with the inflow of revenue. However, with the restrictions in place, banks are eliminating freebies and bringing about other changes to get the money flowing.