WASHINGTON—Credit unions continue to offer the lowest-fee checking products that carry the best rates among branch-based institutions, a new report indicates.
WalletHub’s Q2 Banking Landscape Report shared those findings, saying that while inferior to online-only savings accounts, credit union checking accounts continue to offer the best interest rates among branch-based institutions, providing more than nine times as much value as regional and national banks, WalletHub said.
WalletHub, as well, advised consumers looking for the lowest checking-account fees to turn to offers from credit unions, which are 32% cheaper than online checking accounts – the next-best option – on average.
The report shows that personal online-only savings accounts offer 86% higher returns (0.64% average) than the next-highest-paying product, personal online-only checking accounts (0.34% average).
WalletHub said banks seem to be discouraging long-term saving by offering 151% higher interest rates on checking branch accounts than savings accounts.
Consumers in the Northeast and West continue to receive significantly lower returns on checking and savings accounts than the rest of the country, earning 73% less on checking accounts and 45% less on savings accounts on average, the study shows.
Free deposit account features are on the rise, with nearly 24% fewer accounts charging out-of-network ATM fees and over 20% more accounts reimbursing ATM-owner surcharges, relative to Q2 2015.
“Contrary to traditional thinking, checking accounts currently offer the highest interest rates available from brick-and-mortar banking institutions, providing 151% higher returns than branch-based savings accounts,” WalletHub explained. “Certificates of deposit still aren’t worth sacrificing liquid flexibility. After all, the average two-year CD actually yields less (0.62%) than your run-of-the-mill online savings account (0.64%).
Business checking accounts are 64% more expensive than personal checking accounts and 166% costlier than personal online-only checking accounts. Business checking accounts also provide 56% lower interest rates and 48% fewer features than personal online accounts.
“So small business owners should gravitate to personal banking options whenever possible – much like with credit cards,” WalletHub advised.
Student checking accounts, which have the lowest fees on the deposit market, are 72% less expensive than their cheapest general-consumer counterparts. But lower fees come at a cost, as the interest rates offered to students are 56% lower than those available to the general-consumer population.
More information on the WalletHub report can be found here.