Phil's Personal Finance Tip of the Day:
'Free' Checking Costs More-Banks Boost Minimum-Balance Rules, Fees as New Regulations Squeeze Revenue
By Robin Sidel | The Wall Street Journal – Mon, Sep 24, 2012 11:37 AM EDT
So-called free checking accounts are more expensive than ever, as the lumbering economy and new regulations squeeze bank revenues.
To avoid a monthly fee, bank customers in the U.S. must keep an average minimum balance of $723 in checking accounts that pay no interest—up 23% over last year, according to a new survey from data provider Bankrate Inc., which analyzed 477 checking accounts at 247 banks and thrifts. The average monthly fee on noninterest checking accounts rose 25% to $5.48, also a record.
Banks have raised fees on automatic teller machines, overdrafts and checking accounts for customers who don't meet new standards tied to account balances or regular deposits.
A public outcry last year over the prospect of new monthly fees for using bank debit cards forced big banks to retreat from the idea. But a soft economy, low interest rates and new government rules that followed the financial crisis are prompting banks to flex their muscles on existing fees.
Banks have raised fees on automatic teller machines, overdrafts and checking accounts for customers who don't meet new standards tied to account balances or regular deposits.
A public outcry last year over the prospect of new monthly fees for using bank debit cards forced big banks to retreat from the idea. But a soft economy, low interest rates and new government rules that followed the financial crisis are prompting banks to flex their muscles on existing fees.
Martha Vockley, of Reston, Va., would like to put some excess cash into a high-yielding online bank account. Instead, she stashes the extra money in her interest-bearing checking account at SunTrust Banks Inc. (STI) to meet a minimum-balance requirement and avoid a $17 monthly fee.
"They have a lot of my money. It seems like this is overkill," said Ms. Vockley, 53 years old. Switching banks, she said, would be too time-consuming.
To read the entire article from The Wall Street Journal/Yahoo Finance:
Proverbs 10:4 — Lazy hands make for poverty, but diligent hands bring wealth.
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