More Free Checking Accounts and Drop in Some Bank Fees in Second Half of 2011

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The percentage of free checking accounts jumped, and averages for checking account fees eased in the second half of 2011, according to the latest data from personal finance website Lower average monthly maintenance fees and minimum balances to avoid fees were among the wins for consumers, though overdraft and ATM fees climbed slightly.

Banking is still a very fragmented industry. To any particular bank, that fragmentation means lots of competition. To consumers, it means lots of choices. Both add up to downward pressure on fees.

Free checking accounts made a comeback in the second half of 2011, according to the latest Bank Fees Survey by Averages for several checking account fees and minimum balance requirements also shrank, signaling that consumer backlash against bank fees and competitive pressures may have made an impact on banks.

The share of checking accounts in the national survey charging no monthly maintenance fee jumped to 39 percent, a rise of more than 4 percentage points over the mid-2011 figures. In that survey, only 35 percent of the accounts surveyed carried no monthly maintenance fee.

Of the accounts that still carried a monthly fee at the end of 2011, the average cost fell to $11.28, down from $11.75 in the previous survey. Also, the average minimum balance required to avoid a monthly fee dropped to $391.41, down from $412.53 in mid-2011 and $517.41 at the end of 2010.

“The drop in average charges and balance requirements is likely the result of banks renewing their competitive habits,” says Richard Barrington, senior financial analyst for

"Banking is still a very fragmented industry, with more than 7,000 FDIC-insured institutions in operation,” Barrington explains. “To any particular bank, that fragmentation means lots of competition. To consumers, it means lots of choices. Both add up to downward pressure on fees."

Though the survey showed a drop in some fees, it also showed an average rise in other fees, namely ATM and overdraft charges. The average fee for using an out-of-network ATM rose to $1.10, up 29 percent from mid-2011. Overdraft charges jumped to $29.23 from the previous survey’s average of $28.85, signaling that banks weren’t willing to lower fees across the board.

Although ATM and overdraft fees moved higher, Barrington says the good news is these fees, unlike monthly maintenance fees, can easily be avoided with planning.

"Unlike monthly maintenance fees, overdraft fees and ATM fees are charges you can avoid with sensible banking behavior,” Barrington says. “Opt out of overdraft protection -- you'll not only avoid these fees, but you will probably develop better banking habits. Also, choose a bank that has ATM locations that are convenient to use, and make sure you use those ATMs and not others."

The latest survey also revealed that 53 percent of the checking accounts at online banks had no monthly maintenance charges -- 15 percentage points higher than the share of traditional banks in the survey that offered checking free of monthly maintenance fees.

For more analysis, please see the Bank Fees Survey from the second half of 2011.

The Bank Fees survey is a part of the Research Center which also hosts America’s Best Rates, a quarterly survey of banks that consistently offer the highest money market rates and savings account rates.


The Bank Fees Survey is published twice a year based on account information from financial institutions in the MoneyRates Index. The MoneyRates Index is a composite of 100 banks, including the 50 largest U.S. banks by deposit amount, plus another 50 mid-sized banks. This sampling was constructed to be broadly representative of the general banking environment.

About has been a leading source of information on bank rates, personal finance, savings accounts and investing since 1999. The site provides the highest rates on CDs, money market accounts and high-yield savings accounts. The Web Marketing Association awarded a Financial Services Standard of Excellence to in the 2011 WebAwards competition. is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to find, research and select the products, services and brands that best meet their needs. The company is a leader in visitor-friendly marketing practices. For more information, please visit

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