Bank Fees Continue to Rise

October 12, 2015, Written By Lynn Oldshue

Bank fees are increasing and the number of free checking accounts is decreasing, according to Bankrate’s 18th annual checking survey.

Monthly Fees
Since peaking at 76% in 2009, the number of free non-interest checking accounts has decreased. Today, only 37% of non-interest accounts are completely free, which is the lowest number since Bankrate began conducting these annual surveys in 1998.

However, 95% of non-interest checking accounts will waive fees if a consumer meets certain requirements. Generally, if a customer maintains a minimum monthly balance or makes direct deposits, the bank will not charge a fee.

For individuals who cannot waive the fee, the average monthly service charge is $5.86, which is an 11% increase from last year.

ATM Fees
Over the past five years, the charge for using an out-of-network ATM has increased 21%. The ATM that is used will charge an average of $2.88 per transaction, and the consumer’s home bank will charge an additional $1.64, which brings the total cost to $4.52.

These fees are adding up to big profits for banks. According to SNL, a financial analysis firm, the five largest banks in the United States made $283 million from just ATM fees in the second quarter of 2015.

Atlanta and New York have the highest fees for using out-of-network ATMs, while Seattle and Dallas have the lowest fees. Below is a breakdown of the fees in 10 major cities.

Highest Average ATM Fees

  • Atlanta $5.15
  • New York $5.03
  • Phoenix $4.88
  • Miami $4.84
  • Milwaukee $4.78

Lowest Average ATM Fees

  • San Francisco $3.85
  • Cincinnati $3.86
  • Kansas City $4.01
  • Dallas $4.11
  • Seattle $4.21

Overdraft Fees
Overdraft fees are also going up. The average fee is now $33.07, which is a 9% increase from 2010. Below are the average costs in the cities with the highest and lowest fees:

Highest Average Overdraft Fees

  • Milwaukee $34.79
  • Atlanta $34.57
  • Baltimore $34.55
  • Denver $34.50
  • Phoenix $34.35

Lowest Average Overdraft Fees

  • San Francisco $30.35
  • Cincinnati $30.44
  • Detroit $30.80
  • Los Angeles $31.88
  • Kansas City $32.00
  • San Diego $32.00

Greg McBride, Bankrate’s chief financial analyst, advises consumers that “all of these fees are completely avoidable” and recommends that customers “shop around for a bank or credit union” that best meets their needs.

The organization surveyed 243 institutions in 25 of the largest U.S. markets. In total, 237 interest and 233 non-interest accounts were examined between July 9 and August 5.

The information contained within this article was accurate as of October 12, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.