The best checking account values in the nation's cities are most often found at community banks, and particularly thrifts, according to Consumer Reports magazine.
Banks and thrifts with assets of less than $3 billion offered the best values for accounts with no minimum balance in 13 of 25 metropolitan areas surveyed.
For accounts requiring a minimum balance, community banks had the best deals in 18 of the 25 markets.
"It's indicative of the community banks' concern and interest in generating local accounts from the community, getting people interested in doing their core banking services at community banks rather than being lost in the megabanks," said Arlin S. Green, chief operating officer at Firstrust Savings Bank, Philadelphia.
A separate survey released Wednesday by the Consumer Federation of America and the Credit Union National Association showed that banks in general charge more and higher fees than credit unions. Federation officials acknowledged, however, that fees at mutual thrifts are similar to those at credit unions.
Bankers and industry consultants pointed out that thrifts traditionally did not offer checking accounts. Therefore, they must try to attract customers who would otherwise keep their money in savings accounts or migrate to larger banks or nonbank alternatives, said Anita Newcomb, managing director of Professional Bank Services in Washington.
The Consumer Reports article, published in the March issue, said that during the last few years banks have been steadily raising their fees and inventing "devious new ones that are becoming harder and harder to avoid."
The magazine claimed it was able to identify at least 100 deposit fees that banks now impose. Checking and savings account charges have jumped 50% since 1990, it said, and the interest paid on account balances hasn't kept pace with inflation.
"Whether you realize it or not, you may be paying far too much in bank fees - and getting low interest and poor service to boot," the article said.
Consumer Reports criticized banks for shutting out poor consumers by dropping even no-frills checking accounts, forcing them to resort to more expensive check-cashing outlets sprouting up in many cities. And it praised laws in Illinois, Massachusetts, New Jersey, New York, and Minnesota for requiring banks to offer basic checking accounts with low minimum balances and fees.
"We're not saying to go out and get this account," said Linda M. Wagner, a spokeswoman for the magazine. "This is an indication of what we found at the big banks in those cities. These are the things you should look for. You can't rely on the banks' directing you to the best account for you."
The survey, conducted for Consumer Reports by Bank Rate Monitor of North Palm Beach, Fla., examined 900 accounts at 250 banks in 25 cities.
