While there are some eye-popping deposit numbers to be found from some financial institutions, and despite more than a dozen boosts to interest rates by the Fed, the rates being paid by most banks on passbook savings have hardly budged.
According to Bankrate.com, banks are paying an average passbook account's interest rate of 0.59%, up just four basis points (BPs) over the past six months. Savings and loans are paying an additional 23 BPs on the same product, according to Bankrate.com's surveys. Credit unions were not included in the survey of the largest banks and thrifts in each of the nation's 25 largest markets.
Bankrate.com reported that it did find more than a dozen institutions paying 4.5% APY or more on money market accounts.
Meanwhile, while rates on basic passbooks have remained low, banks have been more active in increasing punitive fees on customer accounts, according to Bankrate.com.
The average minimum balance to earn interest on checking rose in the survey to $2,465. Yields on the same account, reported Bankrate.com, remain very low. The average yield on an interest-bearing checking account was up one basis point to 0.32% over the fall 2005 survey, and barely up over the all-time low of 0.26%.
Bankrate.com reported that the average deposit required by banks to open an interest-bearing account has dropped to $429.76, the lowest figure in the survey in three years. At the same time, however, to avoid fees on an interest account, the average balance required hit a record $2,465, up 7.4% over one year earlier.
The survey found banks require an average minimum deposit of $72.72 to open a non-interest bearing account, in line with data from the past six months and one year.
On deposits, Bankrate.com found that Internet banks pay the highest rates. On interest bearing checking, for instance, the Internet banks were paying an average 1.96% vs. 0.32% for typical bricks-and-mortar banks.
Among the findings related to fees:
* The average fee charged for bouncing a check has risen to $27.04, up from $26.90 in the survey. The new figure is actually down from $27.13 one year earlier. However, Bankrate.com noted that more banks are using a tiered structure on NSF fees, meaning bouncing more than one check can begin to add up quickly. Bankrate.com said that when it first conducted the survey in 1998, the average bounced check fee was $21.57.
* The survey found that the number of banks that have increased bounced-check fees (39) more than doubled those that have decreased fees (19).
* The cost for using an ATM continues to rise for non-account-holders. The survey found that noncustomers are hit with an average ATM fee of $1.60, and that 98% of banks owning ATMs charge a fee. "The average surcharge has increased 14% in the past year and 21% in the past two years, from $1.40 and $1.33, respectively," Bankrate.com stated.
