It costs more to do your regular banking than it did a year ago. Free checking accounts are disappearing, and bank fees for a number of activities continue to rise. The

2010 Dodd-Frank Wall Street

Reform and Consumer Protection Act placed several restrictions on financial institutions and what they could charge customers for certain activities. Further legislation that took effect in October 2012 limits the amount a bank can charge a business for accepting debit card transactions. Banks expect to lose billions of dollars annually from the changes, and most banks are making drastic changes to other unregulated fees to make up the difference. Bank of America expects the change to decrease its revenues by $2 billion annually.

What it means for consumers is that fees and charges are on the rise with no end in sight. Bankrate.com recently released an updated survey showing changes to fee structures over the past three years.

The Disappearance of Free Checking
Many banks have traditionally offered a checking account that did not carry a monthly maintenance charge as an incentive to transfer over savings and loan products. According to the Bankrate.com survey, 39% of banks offered a free checking account without a minimum balance. That's down from 76% in 2009. The survey also found that 72% of large credit unions still offered the option.

Minimum Balance Requirements
Some of the banks that have done away with free checking still offer it in another form. Banks now require account holders to maintain a certain balance to avoid monthly fees. The average required balance is $723.02, which is 23% higher than just the year before. As an example, Wells Fargo charges a $7 online statement monthly fee. To avoid it, account holders have to either have a $1,500 minimum daily balance or have more than $500 in direct deposits each month.

Overdraft Fees
How much you have to pay if the bank either returns an item NSF or allows the account to go into overdraft is also climbing. The average overdraft per item is at an all-time high of $31.26. Once your account moves down towards empty, an unexpected charge could trigger the overdraft protection and drain the account further.

Monthly Maintenance Fees
The fee you pay every month simply to have the account has risen to an average of $5.48. This is 25% higher than last year. These fees usually cover a set number of transactions per month. Another method a bank can use to recoup revenues is to lower the number and types of transactions covered by the monthly fee. Expect to see both higher fees and less service continue to happen in the future.

Several banks are also experimenting with a monthly debit card fee. Chase was testing a $3 monthly fee and Bank of America tried to charge a $5 monthly fee in 2011. Customer outcry forced them to retreat and cancel charging the fees for the time being.

ATM Fees
Most banks charge a fee for ATMs for users who are not customers. Increasingly, banks are also charging a fee to their customers for using other banks' machines. Both parts of this double-fee are increasing. The average fee for non-customers is at an all-time high of $2.50 (up 4% from last year), and customers who use other banks' machines pay an average of $1.57 (up 11% from last year).

The Bottom Line
As shareholders put increasing pressure on regulated banks to produce profits, customers are likely to continue feeling the pinch of rising fees and charges. Shopping around and doing your homework are the best ways to protect yourself from higher fees.

Related Articles
  1. Tax Strategy

    Profit from Art with a Charitable Remainder Trust

    With a CRUT, art collectors can avoid capital gains taxes on the sale of art– while also leaving their favorite charity a legacy.
  2. Stock Analysis

    Analyzing Porter's Five Forces on JPMorgan Chase (JPM)

    Examine the major money-center bank holding firm, JPMorgan Chase & Company, from the perspective of Porter's five forces model for industry analysis.
  3. Term

    How Time Deposits Work

    A time deposit is an interest-bearing bank deposit that has a specific maturity date.
  4. Term

    Who Benefits from Microfinance?

    Microfinance describes banking services provided to low-income people or groups. Specific services offered by microfinance institutions include microloans, micro-savings and micro-insurance products.
  5. Savings

    How Bank Cost-Cutting Could Affect You

    Banks are looking to cut costs. If history is any guide, it could be at your expense. Here's how to protect yourself.
  6. Personal Finance

    Powerball Mania: Take the Annuity?

    Should you win the lottery, you need to decide how to accept your winnings: lump sum or annuity payouts. Here's how to choose.
  7. Your Clients

    The World’s Wealthiest People Under Age 35

    The fortunes of the wealthiest individuals under age 35 were, in large proportion, amassed by founding technology-related firms. Here is the list.
  8. Stock Analysis

    3 Popular Financials Stocks in 2015 (WFC, COF)

    Find out about some of the popular financials stocks in 2015, why they have become popular and whether they will remain popular going forward.
  9. Retirement

    Is Bank of America Stock Suitable for Your IRA or Roth IRA? (BAC)

    Learn why Bank of America's established track record and long-term stability make it more suitable for a traditional IRA than for a Roth IRA.
  10. Stock Analysis

    Bank of America's 3 Key Financial Ratios (BAC)

    Discover some of the key financial ratios that show the quality of Bank of America's loan portfolio and how profitable the bank has been.
RELATED FAQS
  1. What do states do with unclaimed property?

    Unclaimed property refers to personal accounts in financial institutions or companies that have had no activity and whose ... Read Full Answer >>
  2. Who decides if a financial security should be escheated?

    There is no one entity who "decides" to escheat assets. Rather, financial institutions are required to report inactive accounts ... Read Full Answer >>
  3. How long does a stock account have to be dormant before it can be escheated?

    A stock account is typically considered dormant and eligible for escheatment after five years of inactivity; however, this ... Read Full Answer >>
  4. Do banks have working capital?

    The concept of working capital does not apply to banks since financial institutions do not have typical current assets and ... Read Full Answer >>
  5. How long do I need to keep income tax records?

    Keep all tax-related records for at least three years. For example, keep your 2015 tax return, filed in early 2016, at the ... Read Full Answer >>
  6. Why is the Cayman Islands considered a tax haven?

    The Cayman Islands is one of the most well-known tax havens in the world. Unlike most countries, the Cayman Islands does ... Read Full Answer >>
Hot Definitions
  1. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  2. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  3. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  4. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  5. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center