WASHINGTON—A new report shows that CUs continue to have the lowest checking account fees and offer consumers some of the best deals.
“While inferior to online-only savings accounts, credit union checking accounts continue to offer the best interest rates among branch-based institutions, providing over seven times more value than regional banks and 15 times more value than national banks,” said WalletHub, referring to its latest Banking Landscape Report.
Online-only personal savings accounts provide the market’s highest interest rates, offering 36% higher returns than the runner-up: personal checking accounts from credit unions. Such accounts yield 0.72% and 0.53%, respectively, on average, WalletHub said.
“Traditional banks seem to be discouraging long-term saving by offering 192% higher yields on branch-based checking accounts than savings accounts,” the company explained.
Branch-based personal checking accounts yield an average of 9% more than their best online-only counterparts.
“This marks a significant change from previous years. Online-only personal checking accounts had the advantage for 11 consecutive quarters until Q3 2016,” stated WalletHub.
People in the Northeast and West continue to receive significantly lower banking returns than the rest of the country, earning an average of 66% less with checking accounts and 39% less with savings accounts. Consumers in the Southeast, for example, earn 704% higher checking-account rates and 172% higher savings-account rates their counterparts in the West, the report shows.
WalletHub said that people looking to save on checking account fees should focus on offers from credit unions, which are an 39% cheaper than the next-best option: online checking accounts.
Other study findings:
- Checking accounts from community banks are 46% less expensive than those from national banks and have 24% more features. Their interest rates are nearly 10 times higher on average
- The number of checking accounts with rewards declined by 14.66% during Q2 2017
- Financial institutions appear to be courting new checking account customers by reducing minimum-to-open requirements (down ~14% year over year) and reducing the monthly fee by 4%, while increasing the average interest rate (up 23%), WalletHub said
- Certificates of deposit still aren’t worth sacrificing liquid flexibility, said WalletHub. “After all, the average 2-year CD actually yields about the same (0.73%) as your run-of-the-mill online savings account (0.72%).”
- Business checking accounts are 74% more expensive than branch-based personal checking accounts and 183% more expensive than online-only personal checking accounts. Business checking accounts also provide 74% lower interest rates and 49% fewer features than personal online accounts.
- Student checking accounts, which have the lowest fees on the deposit market, are 71% less expensive than their general-consumer counterparts. But lower fees come at a cost, as the interest rates offered to students are 68% lower than those available to the general-consumer population, WalletHub said.