NORTH PALM BEACH, Fla. -
In addition, Bankrate.com is reporting its Fall 2007 Checking Account Pricing Study has found that fees and balance requirements for interest and noninterest checking accounts "continue to move in opposite directions, with those for interest accounts ratcheting higher while noninterest account costs move lower still."
The findings are based on a survey of one interest and one noninterest checking account at the largest banks and thrifts in each of 25 large markets, with of 249 institutions surveyed representing 247 interest accounts and 226 noninterest accounts. The survey also included 16 checking accounts being offered by Internet-only banks.
Observing that banks apparently are sticking with the adage "records are meant to be broken," it said the most recent survey found "the average cost for a bounced check and withdrawal from another bank's ATM reaching new highs."
According to Bankrate.com, the average cost of a bounced check (NSF) was up 3% an average fee of $28.23. "Of the banks in both this year's and last year's surveys, 88 banks increased the cost of a bounced check, while just 19 banks decreased it," Bankrate said. "Also worth noting is that Bankrate.com gathers the cost of the first bounced check, and with the use of tiered structures by some banks whereby bouncing additional checks costs even more, the cost of overdrawing an account can quickly escalate."
Meanwhile, ATM surcharges also have climbed, according to the survey, with the average surcharge assessed nonaccount holders to use the ATM, rising to $1.78 from $1.64 one year earlier. "The trend toward higher fees is unmistakable, with 43 institutions raising the cost for noncustomers to use the ATM in the past year, and just three reducing the fee," Bankrate.com reported.
For consumers, avoiding fees is only becoming more difficult, Bankrate.com found, reporting that the average balance to avoid the monthly service fee is an "eye-popping" $3,316.60, a 25% increase over one year earlier. "The soaring balance requirement is nothing new, having hit a record high for three consecutive surveys," Bankrate.com said. "The move higher was driven by the 31 banks increasing the balance requirement against the nine banks that decreased it."
The company said keeping the funds needed to avoid fees in a checking account in a bank is hardly worth it, with the average yield paid by banks in the survey on checking just 0.32% ($10.61 in interest if the consumer keeps the $3,316.60 on deposit for the year).
"Slip up just once, and one monthly fee of $11.72 more than wipes that out," noted Bankrate.com, which aims its analysis at consumers. "Not to mention, the interest earnings are taxable but the fees aren't deductible. Bottom line, an interest checking account requires a whole lot of sacrifice on your part, without delivering much in return."
There is some good news, according to Bankrate.com. - the average fee charged by banks when their own customers use another bank's ATM remains at the lowest level since 2002, holding steady at $1.25. "The trend evident in surveys of the past two years has been for banks to enhance customer satisfaction by providing free or lower-cost access to nonbank automated teller machines," the Bankrate.com analysis said. "However, it doesn't erase the customer's exposure to a surcharge by the ATM owner unless the bank has a reimbursement policy in place."
Other good news, the company said, can be found in some of the newer entrants offering products online. Some of those checking accounts, Bankrate.com said, are paying 4% or more.
