CHICAGO (AP) -- Truly free checking accounts are becoming rarer as banks add more fees to boost their profits.
Only
39 percent of non-interest checking accounts are free to all customers,
according to survey results released Monday by financial data publisher
Bankrate.com. That's down from 45 percent last year and 76 percent in
2009.
Among other fees, the average monthly
service fee on checking accounts is a record $5.48, up 25 percent from
the Bankrate survey a year ago. Also, the average fee charged by an ATM
operator to a non-customer rose 4 percent to a record $2.50, Bankrate
said.
Customers may be near a breaking point, the survey suggests.
Seventy-two
percent of those surveyed said they would consider switching banks if
theirs raised its fees on checking accounts, up from 64 percent in March
2011. Households with an income of $75,000 or more are the most likely
to switch, at 82 percent, Bankrate said.
The survey was based on an analysis of 477 checking accounts at 247 banks and thrifts.
The
largest U.S. banks all offered free checking with no strings attached
until 2009. Banks say they have raised fees lately because of federal
regulations on debit cards and overdraft policies that stand to cost
them billions of dollars in annual revenue.
Yet
new data shows that overdraft fees have rebounded, according to Moebs
Services, a financial research company in Lake Bluff, Ill. Overdraft
revenue for U.S. financial institutions increased 2.1 percent to $31.5
billion for the fiscal year ended June 30. The $700 million increase
came from a 3.6 percent increase in price and a 1.4 percent decrease in
volume, Moebs said.
Consumers who practice
good financial habits should still be able to avoid incurring ATM and
overdraft fees, according to Greg McBride, senior financial analyst for
Bankrate.
"Checking accounts that are free on a
stand-alone basis continue to diminish," McBride said. "But a free
checking account is still within reach of the majority of Americans,
whether by getting the fee waived through direct deposit or moving to a
bank or credit union that still offers free checking."
Copyright 2012 by The Associated Press. All rights reserved.
