Checking accounts have been getting more expensive, as banks hike monthly costs, ATM charges and overdraft fees, according to a survey of more than 100 banks released Monday by bank comparison website MoneyRates.com.
The survey, which is published twice a year, had showed some costs declining at the end of 2011, including monthly maintenance fees. But in the first half of this year, fees and the number of requirements consumers must meet in order to avoid them, increased in every category the survey tracked.
Monthly service fees averaged $12.08, up from $11.28 at the end of 2011, meaning customers are now paying an average $145 over the course of a year. The average charge at large banks was $13.88, compared with $9.87 at small banks and $11.17 at medium banks.
Many banks allow customers to avoid monthly fees if they meet certain requirements like carrying a minimum balance. This year, the average minimum balance needed to avoid fees has jumped $856 to $4,446.57 -- making it harder for customers to avoid the charge.
The minimum amount needed to open an account has also risen -- from $391.41 at the end of 2011 to $408.76 this year. Overdraft fees have crept up 60 cents to an average of $29.83. The fee banks charge non-customers for using their ATMs has edged up from $2.37 to $2.40, while the fee banks charge their customers for using out-of-network ATMs has climbed from $1.10 to $1.28.
These rising fees come as banks continue to look for ways to recoup revenue lost under the Durbin amendment, which took effect last October and limited the fees banks can charge retailers each time customers swipe their debit cards to make purchases, known as interchange fees.
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"As business conditions have gotten tighter, it's a lot more difficult for banks to offer free checking," said Richard Barrington, senior financial analyst at MoneyRates. "They're seeing less money in the form of interchange fees, so they're having to charge more to customers."
Overall, only 35% of checking accounts don't have monthly fees -- compared to nearly 39% at the end of 2011. Those percentages vary greatly between small and large banks, with about 46% of small banks offering checking accounts without monthly fees -- compared to 21% of big banks.
The survey also found that online banks often offer cheaper options, with two-thirds of checking accounts at online banks charging no monthly fees.
Ally Bank, PerkStreet Financial and ING Direct, for example, are all online banks that offer checking accounts without any monthly maintenance fees.
Barrington therefore recommends that consumers consider checking accounts offered by online banks or smaller financial institutions when shopping around for a new account.
It's also important to pick a fee structure that fits your banking habits, he said. If you're a chronic overdrafter, for example, pick a bank with lower overdraft fees. If you aren't planning on keeping very much money in the account, pick an account without a monthly service fee or one that allows you to avoid the monthly maintenance fee with a low minimum balance.
Credit unions can also be a good bet. A separate report released from Bankrate.com, another website that compares banking products, found that 72% of the largest credit unions still offer accounts without monthly fees or minimum balance requirements.