Online Banks Buck Trend of Higher Fees in New Bank Fees Survey

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Some bank fees rose in the second half of 2012, according to new research by But online banks handily outperformed traditional banks by offering lower fees across all measures, signaling that fee-weary consumers may find relief by switching to an online institution.

Consumers need to wake up. Large banks have the most customers, even though they charge the highest fees. Consumers need to be more price-savvy when choosing a bank, and they’ve got to be more open to changing their existing banks.

The average monthly maintenance fee and overdraft fee that banks charge consumers continued to increase in the second half of 2012, particularly at brick-and-mortar institutions. That’s one of the findings of the latest Bank Fees Survey by, a semiannual study that tracks bank charges imposed on checking-account customers.

These increases come following a mid-2012 survey that showed average bank fees increasing in every category measured. While not every type of fee rose in the new survey, the fee hikes for average monthly maintenance charges ($12.26 from $12.08) and higher average overdraft fees ($30.01from $29.83) show that many banks continue to search for ways to boost their revenue after years of tightening financial regulations.

Still, some types of banks posted much lower average fees than others. Online banks stood against the trend toward high fees, posting an average overdraft fee well below that of traditional banks ($25.10 vs. $30.13) and offering checking accounts free of monthly maintenance fees at a percentage nearly twice that of traditional banks (67 percent vs. 35 percent).

“Online banks are using their cost advantages to hold the line on fees,” says Richard Barrington, senior financial analyst for “Between the existing fee advantages of online banks and the fact that traditional banks are continuing to raise fees, we could see an acceleration of the trend toward online banking.”

Smaller banks – institutions that have less than $5 billion in deposits – also posted figures that bettered those of the medium and large banks in the survey. Among small banks, 48.3 percent offered free checking accounts in the survey, compared with only 22 percent of large banks (those having more than $25 billion in deposits). Medium-sized banks fared better than large banks, with 42.5 percent offering free checking, but their offerings still trailed small banks’ by nearly 6 percentage points.

“Consumers need to wake up,” says Barrington. “Large banks have the most customers, even though they charge the highest fees. Consumers need to be more price-savvy when choosing a bank, and they’ve got to be more open to changing their existing banks.”

Not every measure in the survey marked a loss for consumers, however. The number of banks offering no-fee checking accounts rose to 36.6 percent, up slightly from the previous survey’s figure of 35.3 percent. According to Barrington, shifts like these signal that even lower-income consumers still have options for banking, particularly if they are willing to consider an online institution.

“It’s not just online fees that are lower,” says Barrington. “Online banks also have lower account minimums, making it easier for less wealthy customers to have a checking account. This could be an important solution for unbanked households, especially as Internet penetration rates continue to rise.”

For the full details, please see Banks Fee Survey EOY 2012: Online banks resist fee hikes.

The Bank Fee Survey is updated twice a year using data on checking accounts offered by banks in the MoneyRates Index. The MoneyRates Index is a composite of over 100 banks, including the 50 largest U.S. banks by deposit amount and a similar number of 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 certificates of deposit, money market accounts and high-yield savings accounts. 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 research, find and select the products, services and brands that best meet their needs. The company is a leader in ethical marketing practices. For more information, please visit

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