Free Checking Accounts Become Rare as Banks Raise Fees

The survey revealed that the checking accounts monthly service fee is as high as $5.48 on an average, an increase of 25% from the year ago period. Similarly the average fee of ATM operators to their non-customers climbed 4% to reach a record high of $2.50.

The survey suggested that customers might be losing their patience.

About 72% of the prospects surveyed were thinking of changing their banks if they continued to raise their fees on checking accounts, compared to 64% with this feeling in March 2011.

The survey pointed out that around 82% of the checking account households having incomes over $75,000 would be the first ones to change their banks. The survey covered 477 checking accounts and 247 banks and thrifts.

All the large banks in the U.S. were offering free checking accounts without any conditions until 2009. However, the banks have been arguing that their increase in fees for checking accounts was mainly due to the federal regulations on overdraft policies and debit cards that could lead to loss of billions of dollars in their annual revenues.

Still, new data by Moebs Services reveals that overdraft fees have been improving, with the overdraft revenue of the financial institutions in the U.S. rose 2.1% to $31.5 billion for the year ending June 30. The increase of $700 million was mainly from 3.6% rise in price and 1.4% drop in volume.

A senior financial analyst mentioned that consumers could avoid overdraft fees and ATM charges by following good financial habits.

Free checking accounts continue to diminish but majority of Americans could still have access free checking accounts either by fee waivers through direct deposits or switching to banks or credit unions that offer free checking accounts even now.