More Than a Quarter of Checking Account Holders Paying Fees Every Month
A new Bankrate study found that 27 percent of U.S. adults, or 57 million people, currently pay monthly fees for their checking accounts, such as routine service charges, ATM fees, and overdraft fees. The study also found that 48 percent of them are sacrificing their level of recession preparedness, like paying down debt and saving for emergencies, by doing so.
“In extraordinarily uncertain times like these, experts recommend freeing up any amount of cash you can to recycle back into an emergency fund,” said Sarah Foster, Bankrate analyst. “But before cutting the cable cords or eliminating a streaming service or two, switching to a no-fee bank and eliminating those checking fees could be an even easier place to start.”
While 73 percent of checking account holders are taking advantage of fee-free accounts, those that pay fees are spending an average of $24 per month, or $288 per year. An earlier Bankrate study found that the average overdraft fee is $29.80, the average non-sufficient funds (NSF) fee is $26.58, and the average monthly fee for interest checking accounts is $16.19.
Younger generations are more likely to pay checking fees, with 46 percent of Gen Z and 42 percent of millennial checking account holders paying monthly fees, compared to 22 percent of Gen X and 14 percent of baby boomers. Millennials are also paying the most for monthly checking account fees at $28.
31 percent of checking account holders who pay monthly fees chose reasons unrelated to products or services when asked why they have stayed with their bank or credit union. They said they have a convenient branch location, that it was too much of a hassle to switch, and that they don’t have time to shop around or research another institution.
When asked what checking account features were most important, 19 percent of account holders who pay monthly fees ironically said no/low monthly fees. Some also said good customer service (18 percent), user-friendly banking/mobile app (14 percent), and strong reputation (12 percent).