Free Checking Not Dead Yet at Credit Unions

“With free checking accounts becoming less prevalent in national banks, credit unions can be an invaluable resource for the average consumer.”
— Greg McBride,

According to a study by, 39 of the 50 largest credit unions in the U.S. still offer free checking.

Key Question: With new regulations and increasing pressure to generate fee income, how many of these 39 credit unions  will still be offering free checking in 2011?

Bankrate surveyed the 50 largest credit unions across the country for its 2010 Credit Union Checking Study.

Among those credit unions not offering free checking, the highest monthly fee was $10 while the lowest was $1.

Minimum Opening Balance

Just over half of the credit unions surveyed, 27 out of 50, do not require a minimum opening balance on their free checking accounts. Of those requiring a minimum opening balance, the average was $16. Though many credit unions in the survey require $1 as an opening amount, the study found three that required a $100 minimum. Teachers FCU and Addison Avenue FCU had the highest minimum-opening balances: $2,500 for a 0.15% and 0.05% yield respectively.

Interest APY

19 of the credit unions surveyed had interest-bearing checking accounts. The average yield was 0.30% and the highest was 1.01% at Police & Fire FCU in Philadelphia.

Restrictions, Conditions & Fine Print

Forty-one of the credit unions have no balance requirement or monthly fee on their checking accounts.

Almost all of the credit unions, 47 out of 50, allowed unlimited monthly transactions. State Employees’ Credit Union, one of the three credit unions putting restrictions on their free accounts, lets members write up to 50 checks per month but are charged 20¢ per check thereafter. It’s hardly worth noting, so why not make it free?

American Airlines FCU allowed four free transactions — deposits or withdrawals — by phone or in person, and charges $2 for subsequent transactions.

“The average consumer does 25 to 30 transactions per month on an account,” Hank Israel, director at financial consulting firm Novantas, told Bankrate.

Only one of the credit unions surveyed charged for debit card transactions. The State Employees’ Credit Union of Maryland assessed a 25¢ fee for each PIN-based purchase with a check card.

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