Highlights of the Bankrate.com
Checking Account Pricing Study
By Michael D. Larson • Bankrate.com

What are the most important points consumers should take away from Bankrate.com's October 2000 checking study?

Take a look at these key findings:

• Interest checking accounts continue to be a bad deal for consumers, especially at traditional brick-and-mortar banks. Average yields remain below 1998 levels despite several Federal Reserve Board interest rate hikes, for instance, while the number of accounts yielding less than 1 percent interest -- a mere $50 on a $5,000 balance -- has skyrocketed. To top it all off, the average monthly service fee on these accounts has risen almost 9 percent to $10.43 during the past two years.

• Non-interest bearing accounts, on the other hand, haven't changed much. That makes them the sensible choice for most customers. Both the average minimum to open a non-interest account and the average monthly service charge to keep one open are roughly the same as they were in October 1998.

• The average balance required to avoid monthly fees fell from a year ago on both interest and non-interest bearing accounts. But almost a third, or 354, of the accounts surveyed come with a fee regardless of balance. Consumers should use Bankrate.com data to find one that doesn't.

• Certain ancilliary and punitive charges for banking -- just like those for credit cards -- keep marching higher, raising the cost of screwing up. The average non-sufficient funds, or bounced-check, fee climbed again to almost $24. That's up about 10 percent from two years ago. The highest fee found was a whopping $35 per transgression, compared with a maximum of $32 this past spring.

• ATM charges are more expensive and more difficult to avoid than ever before. In fact, Bankrate.com estimates that consumers will pay some $2.2 billion in ATM surcharges this year, up from $1.5 billion two years ago. But there is a light at the end of the tunnel -- the percentage of banks and thrifts not charging for point-of-sale transactions has risen steadily. That means consumers can avoid the rapidly escalating fees by getting cash back at supermarkets, drug stores and the like.

• Internet banks continue to dominate the banking field in almost every category, so consumers might want to consider going virtual. Online banks pay much higher interest and require less money to open interest-bearing accounts, for example. Much fewer of them charge monthly fees and when they do, they charge less. Hardly any of them charge customers to use another institution's ATMs and a majority actually reimburse customers for the other institution's charges.

--Posted: Oct. 2, 2000