Checking Account Maintenance Fees Growing More Quickly Than Overdraft Fees, Survey Shows
Foster City, CA (PRWEB) November 16, 2009 -- While checking account overdraft fees have received a great deal of critical attention and have led to proposed legislation curbing their use, new survey data released by MoneyRates.com show that monthly maintenance fees have grown more quickly than overdraft fees.
An analysis of checking account fees charged by banks found that monthly maintenance fees grew 15.3 percent between the first and third quarters of 2009--many times the 2.8 percent growth rate of overdraft fees in the same period. The fee data studied by MoneyRates.com was based on banks doing business in New York state but is believed to be indicative of fee trends nationwide.
While overdraft fees are hardly a non-issue--they were a $37 billion business last year--the survey suggests that considerations other than overdraft fees should be the focus of consumer and congressional concern.
"The proposed legislation curbing overdraft fees is well-intentioned but misguided," MoneyRates.com spokesperson Richard Barrington said. "Most bank customers realize they can avoid overdraft fees by not overdrafting their accounts. Those maintenance fees, on the other hand, are going to be there month after month."
A poll conducted by MoneyRates.com and another top personal finance site, GetRichSlowly.org, confirms that bank customers have bigger concerns than overdraft fees. Monthly maintenance fees were identified by poll respondents as the number-one issue they look at when choosing a checking account. Overdraft fees ranked fourth out of four specific concerns cited in the poll.
Just under half, or 49 percent, of poll respondents said that they looked primarily at monthly maintenance fees when choosing a checking account. This figure topped the 24 percent of respondents who said the bank's reputation and reliability was the number one issue and the 18 percent who said the interest rates on their account balances was paramount. Only 6 percent of poll respondents said that overdraft policies and fees were the most important issue in choosing a checking account.
Barrington suggested that the faster growth rate of monthly fees may show that banks are already adjusting to the scrutiny on overdraft fees:
"It's like squeezing one end of a balloon--you'll just put the stress somewhere else," Barrington said. "If overdraft fees are cut back, banks will have to make it up elsewhere, such as in higher monthly fees or by offering lower interest rates on savings accounts. Making new rules will just lead to different tactics by the banks. Ultimately, the only way to minimize fees is by smart shopping and by adjusting account behavior so you don't incur unnecessary fees. In this case, consumer activism can be much more effective than legislation."
MoneyRates.com plans on releasing a similar fee analysis semi-annually. Further details on the fee survey are available at http://www.money-rates.com/news/Monthly_Checking_Account_Maintenance_Fees_Growing.htm.
MoneyRates.com has been a leading source of information on bank rates, personal finance, savings accounts and investing since 1999. The site provides the highest rates on certificates of deposits, money market accounts and high-yield savings accounts.
GetRichSlowly.org--recently named most inspiring money blog by Money magazine--is devoted to sensible personal finance. Since 2006, founder J.D. Roth has been sharing with thousands of daily readers what he has learned about debt elimination, saving money and practical investing.