Banks Ditch Free Checking at Breakneck Pace, But Not Credit Unions

Bankrate.com surveyed the 50 largest credit unions in the U.S. in January 2014. The survey included one checking account (share draft) at each credit union, along with all associated debit card and ATM fees.

72% of America¹s 50 largest credit unions still offer standalone free checking accounts, according to Bankrate’s report. This is almost double the rate at the nation¹s largest banks and thrifts, where the percentage drops down to only 38%. Bankrate defines “free checking” as accounts with zero monthly service fees or point-of-sale transaction fees regardless of balance.

Another 24% of credit unions offer checking accounts that can become free if certain requirements are met (e.g., e-statements and/or direct deposit are the most common fee waivers). That means free checking — in one form or another — is available at a total of 96% of the nation’s largest credit unions.

Since 2010, the availability of standalone free checking at credit unions has declined modestly from 78% to 72%. Meanwhile at banks, the percentage has plummeted from 65% to 38%.

More than half of the credit union checking accounts that Bankrate.com surveyed do not have a minimum opening deposit requirement (54%), and no account required more than $100.

The average non-sufficient funds fee at credit unions is $26.96 vs. $32.20 at banks. The most common is $25 vs. $35 at banks).

30% of credit unions either do not charge their members for using out-of-network ATMs or provide at least one free withdrawal per week. Among the credit unions that assess fees, $1 and $1.50 are the most common amounts compared with $2 at banks.

Almost all credit unions (96%) charge non-members for using the credit union¹s ATMs. The most common fees are $2 and $3. Banks charge a similar $3 fee.

Only 36% of the credit union checking accounts that Bankrate.com surveyed pay interest at the minimum opening deposit, with the average a measly 0.1%.