Yahoo Finance Worth the cost? Americans pay $159 a year in bank fees
Most people notice bank fees on their monthly account statement. It’s typically just a few bucks, so you glance right over it, but a new study has found that those small fees are really adding up.
According to MoneyRates.com, a financial advice site, the average American pays $159 a year in checking account fees, also called maintenance fees. For customers, the only real way to dodge this charge is to consider online banking. Of the 100 banking institutions analyzed, the study found that 61% of online banks didn’t charge any monthly fees. Online banks, like Ally Bank or State Farm Bank, operate without brick and mortar branches, allowing them to charge customers less overall.
“The good news is that we are seeing a growing number of online accounts being offered,” says Richard Barrington, senior financial analyst and Chartered Financial Analyst (at MoneyRates. “That means consumers have more low-cost banking options, regardless of where they live. You have choices, so if you are paying a monthly maintenance fee you need to make a change.”
Another way to avoid fees is to bank small. The study found that larger banks (those with $15 billion or more in deposits) typically charge more in maintenance fees. In fact, the average maintenance fee at a large bank is $14.93, compared to $11.06 at medium-sized banks and $11.09 at small banks. Overall, the average maintenance fee is $13.25 a month.
The study also looked at other popular fees, including overdraft fees, fees for using ATMs and minimum opening balance requirements. While largely unavoidable, there is one silver lining — these fees are decreasing.
Overdraft fees are among the steepest charged by banks, targeting customers who are less than diligent with regularly checking their account balance. Since 2010, customers have been able to opt out of overdraft protection, yet many feel like they need the back-up plan…and the banks are cashing in. On average, overdraft fees have dropped 16% to $32.22 in the last six months. This is a bit lower than the median overdraft fee of $35 published in the Pew Charitable Trust’s April report. Those annoying ATM fees that we all try in vain to avoid are decreasing as well. On average, banks charge non-customers $2.80 for using their machines, 7% less than last year.
Truthfully, many of us pick our banking institution based on proximity and convenience, but there’s a better strategy. Today, with the variety of banks available, it might be worth researching new places to tuck away your money.
Brittany Jones-Cooper is a writer for Yahoo Finance.
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