Free checking isn’t that easy to get anymore

A lot of banks are making it tougher for customers to qualify for a checking account without having to pay maintenance fees every month. However, customers can still manage to get one by tweaking either their behaviour or changing their bank altogether.

Last year witnessed Wells Fargo’s change in requirement for free checking. Chase will do it next month and Bank of America has already begun testing an overhaul of the fee structure in 3 different states last week. According to a spokeswoman from the bank, the changes in Chase are in the face of regulations, customer behaviour and competition in the checking account industry. According to major banks, the new regulations that have been introduced under the Dodd-Frank financial regulation bill and the CARD Act will reduce in the revenues of banks going down. As a result checking accounts which were subsidized by these revenues will have to make it up in a different way now. In fact, the number of banks that offered a non-interest bearing checking account for free dropped from 76% in 2009 to 65% in 2010. In fact as more and more regulations are coming into effect this percentage of banks will come down further.

According to a recent survey, an extra 23% of the banks have offered accounts which could come without extra charges with another financial product that could be as basic as a direct deposit. Checking accounts continue to be offered free of charges by a lot of online banks, community banks and credit unions. Most of these do not have the ATM and branch networks which the major banks have. Some of these belong to co-ops which offer free ATM withdrawals or reimburse the customers for the ATM fees deducted. A majority of Americans would therefore feel that free checking is well within their grasp, either with specific behaviours or by shopping around extensively.

Customers should remember that even free checking accounts charge extra for wire transfers, one-time services offered and even bounced checks. Therefore in order to avoid unwanted fees you must read every possible disclosure from the banks. Many checking accounts at Chase will be clubbed into Chase Total Checking that will have a 10 dollar monthly fee in Washington, Oregon and California and 12 dollars in other states. Customers can avoid the charges by going for a 500 dollar or more direct deposit or maintaining a minimum balance of 1500 dollars, amongst other options.

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