Unrestricted free checking accounts are harder and harder to find

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Posted: Thursday, October 3, 2013 12:00 am

Only 38 percent of U.S. banks offer free non-interest checking accounts to all customers, according to Bankrate.com’s 16th annual checking survey, and the unrestricted free checking account is becoming a rarer commodity in the Omaha metro area.

Bankrate.com also reported the average overdraft fee this year is up for a 15th consecutive year, increasing 3 percent to a record $32.20. And the average cost for going outside the ATM network is $4.13, a new high that is up 2 percent from last year.

Checking account maintenance fees and higher overdraft and ATM charges at banks began appearing in earnest after the Durbin Amendment to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. It slashed the fee banks collect when customers swipe a debit card at a retailer to 22 cents, from an earlier average of 44 cents.

Banks lost billions in revenue while incurring substantial new compliance costs stemming from the 2008 Wall Street meltdown.

A survey of some of the banks with the most deposits in the Omaha share area showed a range of checking and fee options; only banks are included, as the Bankrate.com survey didn’t cover credit unions.

The bank with the largest share of metro-area deposits, First National Bank of Omaha, says an unrestricted free checking account is a “cornerstone strategy.”

“This isn’t just a special promotion,” said spokesman Kevin Langin. “It epitomizes how we’ve always done business.”

The First National account comes with a menu of free extras, such as no debit-card service fees, free online bill pay and free incoming wire payments. There is also one free bounced-check forgiveness every 12 months.

Langin said First National’s overdraft fee is $33, 80 cents above the Bankrate.com national average, and has been for several years.

First National’s overdraft policy does come with a nice perk.

“We will not charge an overdraft fee on any account that is overdrawn by $20 or less,” Langin said.

The bank doesn’t charge a fee for using its ATMs or for using someone else’s, although the other ATM owner might.

San Francisco-based Wells Fargo, the second-largest deposit holder in the metro area, does not offer an unrestricted free checking account, spokeswoman Angela Kaipust said.

But as with most banks offering similar accounts, there are ways to make it free.

“Most of our accounts provide customers a variety of ways to avoid monthly service fees,” Kaipust said. “For example, in one of our accounts, the monthly service fee is waived if you use your debit card 10 times during that month.”

At Wells Fargo, the standard overdraft fee is $35, unchanged from a year ago; teen accounts get dinged $15. Kaipust said overdraft protection plans are available. The company charges $2.50 to use other ATMs, the same as last year.

Mutual of Omaha Bank, the third-largest deposit holder in the metro area, doesn’t offer free checking, spokesman Andy Halperin said. The overdraft fee is $30 and unchanged from a year ago, as is the $3 out-of-network ATM fee.

Minnesota-based U.S. Bank is the next-largest deposit bank in the metro area.

The bank’s Pat Swanson said Money magazine for two years has recognized U.S. Bank for its basic checking accounts, noting the relatively low deposit thresholds for avoiding fees and no monthly checking account fee for students, military personnel and senior citizens, Swanson said.

There are a number of ways customers can have their monthly account maintenance fee waived, such as having monthly direct deposits totaling $1,000 or more or maintaining an average account balance of $1,500.

Overdraft fees are and were $36, along with a $2.50 out-of-network ATM fee.

Bank of the West, another metro-area deposit leader, also offers a checking account that can wind up with waived fees if certain conditions are met, such as 10 debit card purchases, a $250 per-month direct deposit or a minimum balance of $1,000, spokeswoman Debra Jack said.

“Our Easy Checking account is a good example of how we aim to offer customers choice and convenience,” she said. The average overdraft fee incurred in Nebraska in 2013 is $34, which is unchanged from 2012. The out-of-network ATM fee is 2.50, up 50 cents from a year ago.

Lincoln-based Pinnacle Bank offers free checking to “all customers who qualify for a standard checking account,” said vice president Alyssa Simon.

Customers who don’t qualify, she said, might qualify for the Safe eChecking Account, which uses electronic statements and charges no monthly fees. That account doesn’t come with check-writing privileges and can’t be electronically overdrawn, Simon said.

Pinnacle charges low overdraft fees by national standards: $28 for items over $10, the same as last year. Out-of-network ATM fees are unchanged at $1.50.

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