NEW YORK—A new study shows the big gap between the percentage of banks and CUs offering free checking still exists. And the analyst behind the report does not see that gap shrinking in the coming years.
A new study from Bankrate.com shows that 72% of America’s largest credit unions still offer standalone free checking accounts, while only 38% of the nation’s largest banks and thrifts do the same.
In addition, 26% of credit unions—for a total of 98%—offer checking accounts that become free if certain requirements are met.
“The numbers illustrate that free checking is a staple product across most credit unions,” said Greg McBride, chief financial analyst at Bankrate.com. “This has been the case with credit unions before it became fashionable to offer free checking, after regulatory changes pushed banks off the free checking bandwagon.”
McBride told CUToday.info that he does not expect credit unions to lose their advantage here in the years ahead.
“The percentages may somewhat change, but the size of the gap, I believe, really won’t change.”
The study also shows that among surveyed CUs, no account required more than $100 to open, and 62% have no minimum opening deposit.
“The average minimum required to open an account is just $9.84,” explained McBride.
The report confirmed, too, that CUs still charge lower fees, with the $26.78 being the average overdraft fee at credit unions, compared with $32.74 at banks.
“Punitive type fees, such as overdrafts or going outside the ATM network have increased very significantly at banks, while the increase at credit unions has been modest,” said McBride, who pointed out that CU fees are rising.
Thirty percent of credit union accounts surveyed provide at least one free out-of-network ATM withdrawal per week. Of the accounts that charge for out-of-network ATM withdrawals, $1.50 is the most common fee. “It’s $2.50 at banks,” said McBride.
Ninety-six percent of credit unions charge non-members who withdraw money from the credit union’s ATMs. “This is the area of greatest similarity between credit unions and banks, both typically charge $3 to non-customers/non-members using their ATMs,” explained McBride.
Among the credit unions that charge monthly fees, $2 and $3 are tied for the most common fee—about half of the average at banks.