Free checking gets harder to find as bank fees skyrocket

SEATTLE -- A new study shows many of the major bank fees are now at record highs. But with just a little bit of effort, you can avoid most of these fees.

Here are the key findings from the Bankrate 2012 checking survey:
  • The average monthly maintenance fee for a non-interest checking account is now at a record high of $5.48. That's a jump of 25 percent from last year.
  • Overdraft fees are also at a record high -- the average overdraft fee is now $31.26.
  • And the cost to get cash from an out-of-network ATM is up dramatically. Expect to pay an average fee of $2.50 to the owner of the ATM-- a new record -- plus your bank will charge you another $1.57 on average, an increase of 11 percent.
As fees go up, totally free checking is harder to find.

"The availability of free checking continues to decline," said Greg McBride, Senior Financial Analyst at "At this point, just 39 percent of non-interest accounts are available for free with no strings attached. And that's down from a peak of 76 percent just 3 years ago."

Why is this happening?

"The decline of free checking and the acceleration of bank fees is attributable to two regulatory changes that have left banks with a big revenue gap to fill - restrictions on when they can charge overdraft fees and restrictions on how much money they get when consumers swipe their debit card," McBride said. "Both have left them a big revenue gap that they have to fill either by raising other fees or eliminating the free checking account."

The survey shows that you can still get a free non-interest checking account at most banks, but it may require a minimum deposit or signing up for direct deposit of your paycheck or Social Security check.

Of course, there is another option: move your money. Look for a financial institution - a credit union, community bank or online bank - that offers totally free checking with no requirements to qualify. Bankrate found that 72 percent of the largest credit unions still offer free checking.