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Checking accounts: Still risky

By Marcie Geffner · Bankrate.com
Wednesday, October 10, 2012
Posted: 6 am ET

Bank checking accounts -- the most widely used financial products in the U.S. -- are a minefield of hidden risks and undisclosed bank fees that vary from state to state, according to a report released Tuesday by the Pew Safe Checking in the Electronic Age Project.

The report, "Still Risky: Checking Accounts in the United States," contains 50 fact sheets that examine the median costs of checking accounts at the nation's 12 biggest banks in each of the states. Also included are national numbers, which are startling as well.

Consider:

  • The median length of disclosure documents for a checking account is 69 pages.
  • The median number of additional fees, in addition to the 12 most common fees, is 26, for a total of 37 different fees per checking account.
  • The median range of costs for these extra fees is $0.10 to $125.
  • About 89 percent of checking accounts nationally have monthly bank fees.
  • The median monthly fee for accounts that aren't free is $12.
  • The median minimum balance required for the monthly fee to be waived is $2,000.
  • The median overdraft fee is $35, plus a potential $33 penalty for an extended overdraft and $12 for an overdraft transfer. In the worst-case scenario, a single overdraft could cost $1,013 during one repayment period.

A cursory review of the state-by-state fact sheets reveals the disparities:

  • In Connecticut, consumers face 97 pages of disclosures, 22 extra fees in addition to the 12 most common, monthly bank fees of $14 and a minimum balance requirement of $5,000 for that fee to be waived.
  • In Maryland, consumers face 49 pages of disclosures, 21 extra fees, monthly fees of $12 and a minimum balance requirement for a fee waiver of $2,000.
  • In California, consumers face 94 pages of disclosures, 23 extra fees, monthly fees of $12.95 and a fee-waiver minimum balance requirement of $5,000.

Again, these numbers are medians, and other states had similar ranges and combinations of disclosure pages, extra fees, monthly fees and balance requirements. Do you pay high bank fees on your checking account? Tell us your story.

Follow me on Twitter: @marciegeff.

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