NEW YORK–Americans whose income has declined due to the COVID-19 pandemic are feeling the brunt of higher bank and CU fees, too, a new report has found. The same survey also released a list of best credit unions and banks.
According to the new Bankrate survey, those with checking accounts at banks or credit unions are paying more than four times as much as those who haven’t been hit financially.
Bankrate reported that its survey found those hit financially by the pandemic saw average monthly charges for their checking account of $11.41, including service charges, ATM fees and overdraft expenses. That compares to just $2.79 on average for those whose income has not been affected by the crisis, the company added.
For the survey overall, the monthly average for checking account fees was $7.65. Minorities and millennials too were among the groups paying more than the average, Bankrate reported.
Topline Takeaways
Bankrate surveyed 2,743 American adults about their bank, account fees and use of their bank’s mobile apps. Among the findings from the survey:
Among the topline takeaways:
- Almost 64% of those with checking accounts increased their use of mobile or other payments technology during the pandemic
- The average checking customer has been with their financial institution for an average of 14 years.
- Bank fees differ significantly if a person’s income was hit. Bankrate’s survey shows those who have seen their income decline due to the pandemic also tend to pay higher bank fees. In fact, on average they’re paying more than four times as much ($11.41) as those whose income remained unaffected by the pandemic ($2.79).
- Despite these results, a sizable majority of all respondents (72%) said that they paid no monthly fees at all. And more than 7% paid less than $5 per month. In total, nearly 80% of respondents paid less than $5 in fees for their account each month.
Age Differences
Bankrate reported age was also related to how much a person paid for their bank account, with younger customers paying significantly more than older ones. Among all checking account holders, the monthly average charge totaled this amount for each age group:
- Generation Z (ages 18-23) paid $13.89
- Millennials (24-39) paid $15.32
- Generation X (40-55) spent $6.18
- Baby Boomers (56-74) spent $2.38
- Silent Generation (75 and older) paid $1.59
Racial Differences
Racial background also played into the results, with Black and Hispanic customers reporting fewer no-fee accounts and higher fees than the overall average, according to Bankrate. While White checking account holders paid $5.37 per month in fees, Blacks and Hispanics paid more than double, at $12.07 and $13.96, respectively, the company found.
Geogra-Fee
Fees varied significantly by geography as well, Bankrate found. Compared to the average $7.65 paid by checking account holders overall, here’s what the four major regions of the U.S. paid, according to the survey:
- The Northeast paid an average of $8.82 per month
- The Midwest paid an average of $4.69 per month
- The South paid an average of $9.08 each month
- The West paid an average of $7.10 each month.
Record Highs
While the latest survey showed most Americans taking advantage of fee-free checking, Bankrate noted that a recent survey it conducted showed the average monthly fee for interest checking and the balance requirement to avoid paying a fee hit new record highs of $15.50 and $7,550, respectively.
Other Findings
Sixty-four percent of respondents increased use of mobile banking and other tech during COVID-19 pandemic, Bankrate reported. When the survey asked participants which of the following they had done more frequently as a result of the pandemic, Bankrate found:
- More than 25% of respondents increased their check deposits by mobile app
- More than 23% increased their use of peer-to-peer payment methods, such as Zelle or Venmo
- About 21.5% raised their use of contactless payment methods, such as Apple Pay or Google Pay
- More than 45% said they increased their bill-paying online
- More than 36% said they hadn’t increased any of these activities in response to the pandemic.
- Checking customers stick around a long time. The average account holder has done business with the same bank or credit union for about 14 years. For those who have been hit with lost income from the pandemic, the average is a bit more than 12 years.
“This year’s average was in line with the average of 14.3 years in 2020, though it’s a significant dip from 2017, when the typical checking customer had been with their bank for about 16 years,” Bankrate reported.
Best Banks & Credit Unions
Saying it is seeking to help consumers find the best options, Bankrate also released its annual Best Banks lists for 2021. The winners are:
- Best Big Bank: Capital One
- Best Online Bank: Ally Bank
- Best Regional Bank: Ridgewood Savings Bank
- Best Credit Union: Alliant Credit Union
Bankrate also asked readers for their picks, through a SurveyMonkey using the same banks and categories. Those winners are:
- Readers’ Choice – Best Big Bank: Chase
- Readers’ Choice – Best Online Bank: Ally Bank
- Readers’ Choice – Best Regional Bank: SunTrust Bank
- Readers’ Choice – Best Credit Union: Navy Federal Credit Union
Methodology
The study was conducted for Bankrate via online interview by YouGov Plc. Interviews were conducted from Dec. 2-4, 2020 among a sample of 2,743 adults, including 2,339 who held checking accounts.