Recognizing that customers hate paying fees on their checking accounts, KeyBank has unveiled a new product that removes account activation and monthly fees and doesn’t allow consumers to overdraft accounts.
The Hassle-Free Account was made available to customers late last month. It has no monthly fee, no balance requirements and free online banking, mobile banking and online bill-pay. Customers using this account have free access to the 1,300 KeyBank ATMs but can’t write paper checks.
“People want simple and clear banking with no surprises,” says Dennis Devine, co-president of Key Community Bank. He says this account will allow customers to spend less time worrying about minimum balances or navigating the fee rules on checking accounts.
In March, Bank of America rolled out a checking account that also eliminated the potential for overdraft fees for consumers. It hoped to appeal to customers who struggle to manage their account balances and were drawing often hefty overdraft fees.
Devine says the introduction of the Hassle-Free Account was in response to consumer demand. He says market research found that 64 percent of consumers surveyed choose banks based on fee structures, followed by problem resolution (61 percent) and how easy it is to do business (58 percent).
“This takes the fee issue off the table,” he says. “Let’s get past that and work with you on much more important questions you have.”
Fewer and fewer banks have been offering free checking accounts, according to Bankrate surveys. From 2009 to 2013, free checking declined from 76 percent of checking accounts to 38 percent, although it appears to be plateauing.
Even for those checking accounts that aren’t free, there are often ways to get around having to pay those fees, such as keeping a minimum balance or enrolling in direct deposit. Devine says the vast majority of KeyBank clients already don’t pay any monthly checking fees.
Devine says that “managing money is not a one-size-fits-all proposition,” and that while he expects this account to have broad appeal, others may be drawn to accounts that offer, for instance, foreign ATM waivers or a relationship rewards program.
What do you think of this new account? Think other banks will follow suit?
To see how free checking fares at credit unions, check out Bankrate’s 2014 Credit Union Checking Survey.
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