Sunday, January 9, 2011

Has the Death of Free Checking Finally Arrived?

In an article from a staff reporter discusses whether or not the death of free checking is finally upon us. He explains that the death of free checking isn't among us yet, but that most banks will offer actions to the owner of the accounts that will waive the extra fees.

"About 65% of financial institutions will still offer free checking, while 23% offer an account where fees can be waived with actions such as direct deposits."

A lot of the mega banks are switching to the accounts that allow the owner to waive the extra fees with certain actions. It all depends on whether or not the owner feels the opportunity cost of doing these special actions is worth saving some cash. I think it is a great compromise. A lot of the mega banks don't require the owner of the account to do anything too drastic to have the fees waived. As a matter of fact, most of the big banks just require that you maintain a minimum balance in your account at all times, or that you deposit a certain amount of money monthly. These seem like pretty fair compromises, but there will still be people who want free checking with no strings attached. A lot of the community banks still allow free checking. I think that the advantages of being a customer for a national bank are worth the special actions needed to waive extra fees. I think most people will stay with the mega banks and do whatever is needed to waive those extra fees (For some people the extra fees may not even promote a problem), but for those who don't take advantage of the benefits the big banks have to offer, a community bank is their best bet.


  1. If we require a minimum balance or that you must deposit a certain amount of money into your account next month are we not discriminating against the poor? The people who will not be able to meet these requirements are probably the people who need the free checking the most not the ones who can keep a high balance. Since banking is such a vital part of the economy, should everyone have access to it without an additional cost?

  2. From the banks point of view, the monthly payments are a way for customers to pay for their account. Keeping a certain balance or consistently making deposits are just ways for someone to pay for their account without the monthly fees. There are still many banks that offer free checking, but in these tough economic times, everyone is trying to make more money anyway they can. Some of the larger national banks need these fees to keep all their employees happy and efficient.