Young man in blue shirt withdrawing from ATM © Michaelpuche/Shutterstock.com

As far as record-setting years go, there have been worse.

While it’s never been more expensive to withdraw cash from an out-of-network ATM, for the first time the average overdraft fee failed to set a record high and free checking accounts increased, according to the 2016 Bankrate checking account survey.

But does that mean we’re approaching a checking account fee ceiling? Don’t count on it.

The average overdraft fee may have fallen, for example, but that doesn’t mean most banks have become benevolent.

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“The average overdraft fee has been increasing year in and year out for 17 consecutive years. And that streak has been broken this year,” says Greg McBride, CFA, Bankrate’s senior vice president and chief financial analyst. “I think it’s too early to say that we’ve reached the peak, particularly because we’ve seen more increases than decreases” among banks in the survey.

Bankrate surveyed 10 banks and thrifts in each of 25 large U.S. markets from July 14 to Aug. 10, 2016.

Read on to find out what’s up and what’s down when it comes to key checking fees.

ATM fees climb ever upward

You might get smacked with 2 fees should you withdraw cash outside of your bank’s network. Both of those fees set average record highs in 2016.

Our study found ATMs on average charge $2.90 to let noncustomers withdraw money. That’s just a 0.7% increase from $2.88 last year, but enough to set a record for the 12th consecutive year.

Your own bank also likely will charge you a fee for using an out-of-network ATM. That fee rose 1.8% to $1.67.

Combined, it will cost you $4.57 to withdraw from an out-of-network ATM, a record high for the 10th consecutive year.

If there’s good news to be had, it’s this: Fewer accounts overall on our survey charge for out-of-network withdrawals in 2016.

But banks continue to face pressure to find income, and ATM fees are an easy place to look, says Kevin Barker, a senior equity analyst with Piper Jaffray, a Minneapolis-based investment bank and asset management firm. “I would expect ATM fees to continue to move higher,” he says.

It will cost you an average of $4.57 to withdraw from an out-of-network ATM.

Avoid these fees by using your debit card at a retailer and getting cash back during the transaction or by finding an account that waves out-of-network withdrawal fees.

A free-checking uptick

For the first time since 2009, the percentage of banks offering free checking with no strings attached increased. About 38% of banks offer non-interest-bearing accounts that carry no monthly fees or balance requirements, up from 37% in 2015.

What’s more, 97% of the checking accounts Bankrate surveyed were either free or waive monthly maintenance fees for account holders who meet certain requirements, such as making regular direct deposits.

Banks in 2016 cut the average monthly service fee on non-interest accounts by 1.4% to $5.78, while the balance required to avoid a monthly fee fell to $670, down 4% from 2015.

The average opening balance requirement also declined, down 5% to $169. Despite the average declines, in all but the opening balance, more banks increased the requirements than decreased them.

So what’s going on?

Regulatory pressure, particularly restrictions on how much banks could charge retailers for debit card transactions enacted as part of the 2010 Dodd-Frank financial reform legislation, helped seal the fall of free checking, McBride says. But any bank that planned to curtail these accounts probably already has.

“The dust has settled as far as free checking,” he says. “That’s not to say there will be a comeback.”

RATE SEARCH: Let Bankrate help you find a free checking account right now.

No record for overdraft fees

The average cost of a first overdraft fell in 2016 – but just barely. Our survey found the fee declined 0.1% on average to $33.04.

Banks charge overdraft fees, also called nonsufficient fund fees, or NSF, when a customer makes a purchase via check or debit card but doesn’t have the funds in their checking account to cover it.

For the 8th consecutive year, the most common fee is $35, and increases outnumbered decreases by 5 to 1.

“The slight decline to us is a minimal change to an already high fee,” says Tom Feltner, director of financial services for the Consumer Federation of America.

Feltner’s organization has called for overdraft reforms, like limiting the number of fees a bank can charge per year and making fees proportional to the amount of the overdraft.

The Consumer Financial Protection Bureau also is expected to weigh in with a rule.

But until that occurs, you can avoid overdraft fees when it comes to debit card use. Banks are required to allow customers to opt out of this type of overdraft, which will mean your purchase would be declined if you don’t have enough money in your account.

Interest-bearing checking account fees soar

Interest-bearing checking accounts continue to come packed with fees and little opportunity to earn interest.

Just 5.5% of banks in our survey offer free interest-bearing checking accounts with no strings attached. That’s actually an increase over 2015. In total 83% will waive a fee based on account balances and other relationship with the bank.

And while the average yield budged slightly in 2016 from 0.05% to 0.06%, that’s not much to get excited about. Even worse, the average balance required to avoid a monthly fee exploded to $7,037, a 10% gain over last year.

A $10,000 balance is the most common requirement for the 2nd year in a row, although that amount is typically aggregated among other accounts at the bank. Opening balance requirements fell 2% to $509.

Year, Average yield
1998-09-01, 1.35
1999-09-01, 1.04
2000-09-01, 1.01
2001-09-01, 0.79
2002-09-01, 0.49
2003-09-01, 0.27
2004-09-01, 0.28
2005-09-01, 0.31
2006-09-01, 0.34
2007-09-01, 0.32
2008-09-01, 0.24
2009-09-01, 0.12
2010-09-01, 0.10
2011-09-01, 0.08
2012-09-01, 0.05
2013-09-01, 0.05
2014-09-01, 0.04
2015-09-01, 0.05
2016-09-01, 0.06
Year, Average NSF fee
1998-09-01, 21.57
1999-09-01, 22.62
2000-09-01, 23.74
2001-09-01, 24.70
2002-09-01, 25.30
2003-09-01, 25.80
2004-09-01, 25.81
2005-09-01, 26.90
2006-09-01, 27.40
2007-09-01, 28.23
2008-09-01, 28.95
2009-09-01, 29.58
2010-09-01, 30.47
2011-09-01, 30.83
2012-09-01, 31.26
2013-09-01, 32.20
2014-09-01, 32.74
2015-09-01, 33.07
2016-09-01, 33.04
Year,Interest,Non-interest
2000-09-01, 346.98, 56.14
2001-09-01, 418.78, 61.38
2002-09-01, 447.68, 55.76
2003-09-01, 494.73, 59.49
2004-09-01, 441.58, 56.97
2005-09-01, 449.53, 72.56
2006-09-01, 615.41, 87.67
2007-09-01, 986.19, 83.02
2008-09-01, 376.75, 82.71
2009-09-01, 473.12, 68.32
2010-09-01, 586.07, 64.40
2011-09-01, 441.61, 59.71
2012-09-01, 507.68, 74.21
2013-09-01, 668.55, 60.27
2014-09-01, 477.48, 65.83
2015-09-01, 519.12, 177.95
2016-09-01, 509.15, 169.12
Year, Interest, Non-interest
1998-09-01, 1561.29, 483.75
1999-09-01, 1532.16, 562.27
2000-09-01, 1659.63, 523.38
2001-09-01, 1707.55, 440.00
2002-09-01, 1866.17, 352.46
2003-09-01, 2257.82, 245.37
2004-09-01, 2086.93, 206.33
2005-09-01, 2294.61, 267.78
2006-09-01, 2660.49, 209.72
2007-09-01, 3316.60, 155.49
2008-09-01, 3461.84, 109.26
2009-09-01, 3372.18, 185.75
2010-09-01, 3883.40, 249.50
2011-09-01, 5587.14, 585.61
2012-09-01, 6117.80, 723.02
2013-09-01, 5802.99, 668.48
2014-09-01, 6211.76, 661.82
2015-09-01, 6362.17, 700.00
2016-09-01, 7037.07, 670.74
Year, Interest, Non-interest
1998-09-01, 9.29, 5.37
1999-09-01, 9.37, 5.08
2000-09-01, 10.05, 4.91
2001-09-01, 10.40, 4.72
2002-09-01, 10.51, 4.33
2003-09-01, 10.86, 3.72
2004-09-01, 10.61, 3.34
2005-09-01, 10.81, 3.00
2006-09-01, 10.74, 2.52
2007-09-01, 11.72, 2.26
2008-09-01, 11.97, 1.93
2009-09-01, 12.55, 1.77
2010-09-01, 13.04, 2.49
2011-09-01, 14.15, 4.37
2012-09-01, 14.75, 5.48
2013-09-01, 14.64, 5.54
2014-09-01, 14.76, 5.26
2015-09-01, 15.24, 5.86
2016-09-01, 15.17, 5.78
Year, Noncustomer withdrawal fee, Out-of-network withdrawal fee
1998-09-01, 0.89, 1.08
1999-09-01, 1.12, 1.16
2000-09-01, 1.33, 1.22
2001-09-01, 1.36, 1.17
2002-09-01, 1.38, 1.28
2003-09-01, 1.40, 1.29
2004-09-01, 1.37, 1.29
2005-09-01, 1.54, 1.37
2006-09-01, 1.64, 1.25
2007-09-01, 1.78, 1.25
2008-09-01, 1.97, 1.46
2009-09-01, 2.22, 1.32
2010-09-01, 2.33, 1.41
2011-09-01, 2.40, 1.41
2012-09-01, 2.50, 1.57
2013-09-01, 2.60, 1.53
2014-09-01, 2.77, 1.58
2015-09-01, 2.88, 1.64
2016-09-01, 2.90, 1.67

“For most people, the non-interest accounts that have no monthly fees and no balance requirements are the way to go,” McBride says.

RATE SEARCH: Find a low-fee checking account that pays now.

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