Nearly all banks will waive monthly fees if customers meet minimum or average balance requirements or the account has direct deposit, the Consumer Federation found. The most common minimum balance required is $1,500 a month. Some banks will also waive fees if the account has a certain number of transactions during the billing period.
Moreover, 59 percent of consumer checking accounts have balances that fall below $500 in a typical month, according to the Consumer Federation, which analyzed a 2010 survey by Raddon Financial Group. Direct deposit is highly correlated with income — the higher the annual income, the more likely the consumer is to have direct deposit, also according to Consumer Federation of America.
“Banks are increasing fees and balances needed to avoid fees,” said Jean Ann Fox, senior adviser for financial services of Consumer Federation, in a statement. “These higher fees and hurdles to avoid fees are especially challenging to the 45 percent of accountholders who maintain low balances and are most likely to overdraw their accounts.”
A Dayton Daily News analysis this month found the local area's biggest banks are introducing new fees for maintaining accounts and mailing statements, and hiking fees for overdrafts and ATM transactions. Of the six biggest banks in the Dayton area, only Huntington and PNC Financial Services offer checking accounts that require no minimum balance or direct deposit.
Consumer Federation of America, a Washington, D.C.-based nonprofit, released its report Oct. 16.