credit & debt

Free Checking Is Tougher to Find

More accounts will come with fees or with strings attached.

A raft of new rules designed to protect bank customers and reduce fees charged by banks has cost the industry billions of dollars in fee-based revenue. How will banks recoup those losses? "They will be re-priced into the business," says Mike Cavanagh, of JPMorgan Chase.

Translation: Consumers will pay higher prices for basic banking services. Among the first services to be affected will be free checking. Free checking was subsidized by customers who paid hefty fees for overdraft protection. Now that banks aren't permitted to enroll customers in overdraft plans automatically, the subsidy will be reduced and banks may charge all customers higher prices for all checking accounts.

That doesn't mean free checking will disappear. But more banks will impose requirements to qualify for an account or fees for specific services. Fifth Third Bank has discontinued free checking for new accounts and now charges $7.50 to $15 a month, depending on the package you select. The fee is waived if you arrange for direct deposit or a regular, automatic transfer from a savings account. Wells Fargo replaced its free checking accounts for new customers with Value Checking, which costs $5 a month unless you meet certain conditions.

Free high-interest checking accounts paying up to 4.25% are available at 750 community banks and credit unions if you meet their criteria (go to www.checkingfinder.com for a partial list). Most require that you use your debit card ten to 15 times a month, receive your monthly statement by e-mail, and have one direct deposit, one automatic payment or one bill paid online each month. If you don't qualify, check with local community banks or credit unions, which may offer free non-interest-bearing accounts (go to www.culookup.com or www.findacreditunion.com to search for a credit union, or to www.icba.org for a listing of community banks).

Most Popular

10 Facts You Must Know About Recessions
Markets

10 Facts You Must Know About Recessions

Fears of an economic downturn are once again on the rise, but what is a recession, exactly? We tackle this and other questions here.
August 7, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 25 Cheapest U.S. Cities to Live In
places to live

The 25 Cheapest U.S. Cities to Live In

Take a look at our list of American cities with the lowest costs of living. Is one of the cheapest cities in the U.S. right for you?
August 7, 2022

Recommended

When Will Student Loans Be Forgiven?
Paying for College

When Will Student Loans Be Forgiven?

Millions of Americans are waiting for the Biden Administration’s next hint, which could come later this summer, at how he’ll address the student loan …
July 7, 2022
Financial Advice from America’s Founding Fathers
credit & debt

Financial Advice from America’s Founding Fathers

What money-management guidance can we glean from the words — and experience — of Benjamin Franklin, Thomas Jefferson, Alexander Hamilton and others?
June 30, 2022
Best National Banks
banking

Best National Banks

These large, brick-and-mortar institutions have branches in several states (as well as online banking), so they’re solid choices if in-person assista…
June 23, 2022
Best Banks for Retirees
banking

Best Banks for Retirees

With these institutions, retirees avoid pesky fees on checks and paper statements and have access to an array of additional wealth and investment serv…
June 23, 2022