A new study has shown that the average monthly fees for interest accounts have reached a record high of $15.50 this year. The increase in monthly fees was a 3 percent increase from last year’s $15.05, breaking the previous high of $15.24 in 2015.
The Bank Rate study of current account and ATM fees for 2020 also found that balance requirements to avoid interest on current accounts rose to new record levels of $7,550, up 6 percent from $7,123 a year ago.
To avoid the fees, 70 percent of interest accounts had to maintain this balance, either in the checking account or in all accounts.
However, the avoidance of the fee for direct deposits is increasing in the USA. 21 percent of accounts waived the fee due to direct deposit alone, an increase of 19 percent and 16 percent in the two previous years.
Bank rate data also showed that less than 7 percent of interest-bearing accounts are free without any specification, with the average return on interest-bearing current accounts following the record low of 0.04 percent last seen in 2014.
Average combined ATM charges fell to their lowest level in four years, reaching $4.64, with Atlanta posting the highest ATM charge of $5.60 and Chicago the lowest of $4.11.
The survey also found that overdraft fees reached an all-time high of $33.47, up from $33.36 last year. Philadelphia paid the highest fees at $35.70, while Cincinnati had the lowest at $30.42.
Bankrate.com’s chief financial analyst Greg McBride said: “To avoid fees, consumers should limit ATM withdrawals to their own bank’s network.
“While large banks have large ATM networks, many smaller banks and credit unions belong to nationwide toll-free alliances that may have significantly more ATMs than even the ATM networks of the big banks.
“Another option is to get cash back at the point of sale if you use a debit card. Banks do not charge fees, and very few merchants do not do so, which is tantamount to a free withdrawal.
There has also been an increase in the availability of free interest-free current accounts. About 47 percent of interest-free accounts are now free, up from 42 percent last year and the highest percentage in a decade.
Another 52 percent of accounts will waive the fee, including 41 percent that will waive the fee solely because of a direct deposit. The average monthly fee account has dropped to a six-year low of $5.27, down 6 percent from $5.61 last year.
Bank Rate surveyed 10 banks and savings accounts in 25 major US markets between July 23 and August 19. Among 245 institutions offering current accounts, one interest and one non-interest account and the associated ATM and debit card fee policies were surveyed, 239 interest and 235 non-interest accounts.