Editor’s note: This is a transcript of the audio file.
A lot of banks have been eliminating free checking lately, but there’s one place free checking continues to thrive: the nation’s credit unions. I’m Claes Bell with the Bankrate.com Personal Finance Minute.
Bankrate’s annual study of credit union checking accounts found that 72 percent of credit unions offer some kind of free checking account. That’s down from 76 percent last year, but in a totally different league than banks, where only 45 percent are offering free checking.
Consumers are taking note. Credit unions have added millions of new accounts over the last year, with many of those coming at the expense of large national banks.
So why are credit unions sticking with free checking? For one, it makes a handy marketing tool to offer free checking when they other guys don’t. But credit unions are also member-owned and run, making it more difficult for them to introduce unpopular new fees than it is at banks.
If you’re thinking about signing up with a credit union, though, keep in mind that “free checking” doesn’t mean no fees. Credit unions charge fees for many of the same things that banks do, including overdrafts and using out-of-network ATMs.
For more on this and other personal finance topics, visit Bankrate.com. I’m Claes Bell.