Foster City, CA/ July 26, 2010:  Were they just crying wolf?  Banking leaders and analysts, often quoted this year as forecasting the death of Free Checking, have little evidence to support their claims. At least according to the recent semi-annual MoneyRates.com Bank Fee Survey.

According to the survey, 44.2% of checking accounts offered today have no monthly maintenance fees.  Further the proportion of banks offering free checking has remained virtually unchanged between January 2010 and July 2010.

The logic behind the forecast of the decline of Free Checking seemed reasonable: as the federal government implemented regulations to reduce perceived predatory bank fees and practices, many experts surmised that banks would need to changing pricing strategies to compensate for lost fee income. 

Richard Barrington, personal finance expert for MoneyRates.com, suspects that banks themselves may be promoting those stories as “scare tactic.”

“When trying to avoid regulation, it's a time-honored tradition for businesses to cry poor,” he says.  “I think that's where all the stories about the death of free checking have come from—bankers trying to scare the public, and by extension the politicians,about the consumer impact of regulation.  Our latest data set paints a different picture, at least so far.”

Another online poll posted jointly at MoneyRates.com and GetRichSlowly.org suggests that the vast majority of financial consumers have access to free checking. In that poll, 58% of respondents stated that their bank offered free,no strings attached checking. Another 36% indicated that they were able to receive free checking by keeping a minimum balance or by bundling services.

“There are nearly 8,000 FDIC-insured institutions out there,” says Barrington.  “Banking is a big, diverse market. That means lots of choices for consumers. Some account terms are better than others—and if you shop around,you can do better for yourself.”

While free checking accounts remain easily accessible, fees for checking services remain on the rise.   The recent MoneyRates.com Bank Fee Survey found that ATM fees and overdraft fees are up from January 2010.  The survey found that:

• Foreign ATM use fees now average of $2.14 compared to $1.88 six months ago.

• The average overdraft fee is $29.26 per item compared to the $28.81 average charge in January.

“Monthly fees range from nothing to $50. Overdraft fees range from $18 to$35.  ATM fees range from $0 to $2 for a bank's own offsite machines, and from$1 to $3 if you use another bank’s machines,” Barrington said.  “If you are complacent and don’t do your homework, you could find banking to be very expensive.”

First commissioned by the New York State Banking Department, the MoneyRates.com Bank Fee Survey is conducted semiannually. Further analysis and survey details may be found in the article, http://www.money-rates.com/news/whats-up-or-down-with-bank-fees.htm

Source: MoneyRates.com