WASHINGTON—Despite potential revenue headwinds for checking accounts, rewards for the product line are making a comeback, a new study indicates.
WalletHub's 2015 Banking Landscape Report shows the percentage of checking accounts at banks and credit unions offering rewards increasing 11.4% in Q1 compared to last quarter and 8.57% relative to last year.
The study analyzed the rates, fees and features associated with more than 2,000 checking and savings accounts, money market accounts and CDs from banks and credit unions nationally.
Despite concerns that Federal Reserve policy would jumpstart a rapid interest rate increase, rates for checking accounts fell 6.37% during the first three months of 2015, while savings account rates rose just 0.85%, the report shows.
CUs continue to charge lower checking fees, offering consumers better deals than banks virtually across the board (see chart below).
Overall, while online savings offerings deliver superior pricing, credit union products continue to offer market-leading interest rates among branch-based institutions, providing more than two-times as much value as regional banks and over five-times as much as national banks, WalletHub found.
Other study findings:
- Personal online savings accounts provide the market’s highest interest rates – offering 65% more returns than the runner-up, personal online checking accounts.
- Checking accounts offer the highest rates at brick-and-mortar institutions, giving 67% higher distributions than branch-based savings accounts.
- Business checking accounts are 129% more expensive than personal online checking accounts, providing 81% lower interest rates and 46% fewer features as well.
- Student checking accounts – which have the lowest average fees on the deposit account market – are 49% less expensive than their cheapest general-consumer counterparts. Lower fees come at a cost, noted WalletHub, as the interest rates offered to students are 87% lower.
- The average non-bank ATM fee has fallen nearly 5% since the end of 2014 and more than 10% dating back to this time last year.
- CDs aren’t worth it in the current market, as a two-year CD offers a lower interest rate than an online savings account.