Many Banks Are Cutting Out Free Checking, But You Have a Choice

According to economic research firm Moebs Services, 81.5 percent of U.S. banking customers had free checking in 2009. That number fell to 72.5 percent in 2011, and all signs point to a further steep decline this year. In fact, most megabanks have already cut their free checking options and have introduced monthly maintenance fees to their accounts.

The changes come as banks scramble to make up lost revenue resulting from new regulations to control some of the high fees banks have charged for things like overdraft penalties associated with debit cards. The Wall Street Journal reports that these fees accounted for somewhere between 11 percent and 28 percent of overall core revenue from the nation’s biggest banks.

Banks are claiming that regulators are forcing them to make these changes. “But it’s not regulators that are making them do so. Shareholders are,” writes Ron Lieber in a January 2011 New York Times article. “So it’s no wonder that you generally don’t hear this sort of reasoning from, say, credit unions, which are subject to the same rules but don’t ultimately answer to the same master.”

Many banks are now implementing requirements for a free checking option, like a minimum balance of $1,500 to $2,000, monthly direct deposit, or agreeing not to use teller service at all.
Fortunately, as a member of a credit union, you have a choice. We exist to serve our members and are still

committed to providing them with checking value and service. Do your homework and read the fine print. If you currently have a checking account at a bank, find out if you could be saving money by switching your account to Mutual Savings Credit Union.