Interest Checking Account Fees, Overdraft Charges Hit Record High

Average monthly fees for interest checking accounts a hit record high of $15.50 this year, a new study has found. The increase in monthly fees represented a 3 percent rise from last year's $15.05, breaking the previous high of $15.24 in 2015.

Bankrate's 2020 checking account and ATM fee study also revealed that balance requirements to avoid interest checking account fees rose to fresh records of $7,550, up 6 percent from $7,123 a year ago.

To avoid the fee, 70 percent of the interest accounts required maintaining that balance, either in the checking account or across all accounts.

However, avoiding the fee with direct deposits is on the rise across the U.S. Twenty-one percent of the accounts waived the fee based just on a direct deposit, increasing from 19 percent and 16 percent the two previous years.

The data from Bankrate, also showed that less than 7 percent of interest-bearing accounts are free without stipulation, with the average yield on interest checking accounts tying with the record low of 0.04 percent, last seen in 2014.

Average combined ATM fees dropped to the lowest level in four years, reaching $4.64, with Atlanta recording the highest at $5.60 and Chicago the lowest at $4.11.

The survey also found that overdraft charges hit an all-time high of $33.47, compared to $33.36 last year. Philadelphia paid the highest charge of $35.70 while Cincinnati was the lowest at $30.42.'s chief financial analyst Greg McBride said: "To avoid fees, consumers should limit ATM withdrawals to within their own bank's network.

"While large banks have large ATM networks, many smaller banks and credit unions belong to nationwide fee-free alliances that may have significantly more ATMs available than even the ATM networks of big banks.

"One other option is getting cash-back at the point of sale when using a debit card. Banks don't charge and very few merchants do either, amounting to a free withdrawal."

There was also an increase in the availability of free non-interest checking accounts. Some 47 percent of non-interest accounts are now free, up from 42 percent last year and the highest percentage in a decade.

An additional 52 percent of accounts will waive the fee, including 41 percent that will waive the fee based solely on having direct deposit. Of those accounts with monthly fees, the average has fallen to a six-year low of $5.27, down 6 percent from $5.61 last year.

Bankrate surveyed 10 banks and thrifts in 25 large U.S. markets between July 23 to August 19. One interest and one non-interest account, as well as their associated ATM and debit card fee policies, were surveyed from 245 institutions offering checking accounts, 239 interest and 235 non-interest accounts.

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Average combined ATM fees dropped to the lowest level in four years John Moore/Getty Images