Answer (from Bank Fees Survey EOY 2014):  Over $154

Headline for this survey could be “Bank Fees Continue Rise to Record Levels.”  Assign this reading to your students during your banking/checking unit to help familiarize them with checking terminology, the fee structure of checking accounts and the importance of comparison shopping.

Survey background:

• Banks in survey set:  “A sampling that includes the 50 biggest retail banks by deposits, plus an equal number of smaller financial institutions…”
• Fees analyzed (good proxy for what is important in selecting a checking account):  “…monthly maintenance fees, overdraft fees and ATM fees, and also tracks the account minimums necessary to open an account and avoid a monthly maintenance charge.”

Fee trends:  

• Maintenance fees:  “Monthly maintenance fees are up by 18 cents, to an average of $12.87.”
  • Minimum balance required to avoid maintenance fees also continued to climb:  “The average such requirement increased by $268.76 over the past six months to $5,708.76.”
  • Only 26% of banks surveyed were free of maintenance fees; down from 28% six months ago.
  • Note that as a student, many banks will offer low or no-fee checking accounts as an enticement.  These deals typically end once you are no longer a student.
• ATM fees:  ‘The average fee charged to customers who use an out-of-network machine increased by 9 cents, to $1.61. The average surcharge for non-customers using a bank’s ATMs increased by 14 cents, to $2.65.”
• Overdraft fees:  “The one exception to this rising fee trend is that the average overdraft fee declined slightly over the past six months. However, this decrease was by just 1 cent, and at an average of $32.47 per occurrence, overdraft fees are still far from a bargain.”

The survey goes on to show the lower fee structure of online banks (note the proliferation of online bank ads on the page):

• Maintenance fees:  63% don’t have monthly fees vs. 24% of traditional accounts.
• Lower ATM fees
• Lower overdraft fees

The author goes on to make an impassioned plea for consumers to comparison shop and choose the lower-cost option:

“The point is that consumers are paying a steep price for flocking to large, name-brand banks. A little bit of comparison shopping, with an emphasis on smaller or online banks, could yield a much better deal for a large number of consumers.”

Lesson extension:  Good opportunity to have students conduct online research to do a more thorough pros/cons of online banks.

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Check out the NGPF Activity on Selecting A Checking Account to hone your students comparison shopping skills

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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