Big financial institutions (FIs) are continuing to charge big fees for checking accounts. On average, there are 30 total fees linked to today’s checking accounts, with some banks charging as many as 50, according to new data from WalletHub.
WalletHub compared checking account costs when used by five distinct types of consumers. These ranged from traditional users looking for a simple means of everyday cash management to high-tech mobile banking users.
According to the report, annual checking account costs are all over the map, ranging from $0 to $700.00, depending on a consumer’s usage patterns. Sadly, the less money checking account holders have, the more they’re hit by checking account fees. What the report refers to as cash strapped, low-income earners, pay an average of $500.00 in annual checking fees. This is usually a result of overdraft fees and not meeting average daily minimum balance requirements.
International, on-the-go” consumers are the second hardest hit by checking account fees although, in the report these individuals never let their account fall below $0. In this case, high currency conversion rates are the culprit. Quite simply, fees for sending money overseas can really add up, making the average cost for this customer segment $327.00.
Everyday joe customers came in third highest in fees paid, with an average of $151.91. The average fees for young and high-tech checking account holders are significantly less than the everyday joe’s, averaging $44.37. Finally, old school checking account users who never use ATMs outside their own financial institution’s networks, never use online banking, never allow their accounts to fall below $0, and never travel or bank internationally, paid the least in average fees at $17.85.
FIs’ checking account competition just got a little stranger, as a major retailer jumped into the mix. Walmart recently announced it will now offer checking accounts. For years, the retail giant has provided a number of fringe-banking services, including check cashing, payday loans, bill pay, money orders, and a host of prepaid and checking alternatives. It even tried unsuccessfully to obtain its own banking charter in 2007.
Walmart is teaming up with Green Dot Bank to offer the checking accounts, with one competitive edge; almost anyone over 18 with a valid ID can get one. The discount retailer is touting the new offering as a “low-cost alternative to traditional bank checking accounts, with no fees for overdrafts or bounced checks and no minimum account balance.”
It’s important to point out the WalletHub report only took into account 65 checking accounts from the nation’s 25 largest FIs, and it’s too soon to tell what amount of interest or success Walmart’s checking accounts will see. However, they’re both good reminders for community FIs to continue to do what you do best. Offer a customer-focused, personal service approach that clearly has the big FIs and the Walmarts of the world beat.