Bankrate's Fall 2006 checking survey

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TwinkiesLooking for a reason to close all your bank accounts and keep your money in a pillowcase under your bed? Head on over to Bankrate and check out their Fall 2006 Checking Survey. Bankrate collects information on bank fees and surcharges, so reading the report is kind of like looking at the “Nutritional Information” box on a 12-pack of Twinkies. Deep fried!

Like Twinkies, the results aren’t good for your heart. Here’s a good clip from the conclusion:

While more banks are permitting customers to go to another bank’s ATM without charge, those transactions don’t come without a cost. ATM surcharges are higher and more prevalent than ever, and even the “deal” some banks give by allowing free nonbank-ATM withdrawals requires maintaining a large balance in a low-yielding checking account. By settling for average interest earnings of 0.34 percent instead of the 5 percent returns available in a savings or money market account, an account holder forfeits more than $100 per year in interest earnings on a $2,500 balance.

It takes a lot of ATM withdrawals to make up for that, and you’ll still have a hard time avoiding surcharges. Instead, it pays — literally — to manage your ATM withdrawals more proactively. Plan to take money out of only your bank’s ATM, planning ahead so the withdrawal can take place in the normal course of a workday or weekend when you’d otherwise be near your bank’s ATM. This sure beats waiting until you’re really in a pinch for cash, then having to make the withdrawal on another bank’s turf.

There’s lots more to learn in the report, and it’s short (three pages) and informative. Definitely check it out. (I’ve put the main conclusions below. If it’s too depressing, allow yourself a Twinkie for Halloween.)

Bankrate's Fall 2006 checking survey

3 Responses to “Bankrate's Fall 2006 checking survey”

  1. Mark D Says:

    OK, so I have to ask the obvious question – what to do about it???

  2. brad Says:

    If you think that’s bad, you should try living in Canada — no bank that I’ve been able to find (here in Quebec, anyway) even offers free checking. You have to pay for a checking or savings account even if you keep a large balance, and the fees are pretty hefty (typically $7 and up per month). ING Direct is the only option for people who want to avoid fees and earn decent interest on their savings, but you still need a regular bank account to transfer money into or out of ING Direct so you have to pay fees no matter what. It truly sucks.

  3. Jim L Says:

    Point well taken. I only use other banks ATMs in an extreme emergency since the convenience justifies the fees.

    My main strategy is to minimize the use use of cash to pay for anything. I charge virtually everything on my credit card and pay it off every month. It can be painful at the end of the month but it also give me a good idea of what I am actually spending each month.

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