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Free checking still available at
credit unions
NEW YORK - Free checking is alive and
well - at least at nation's largest credit unions.
Of the top 50, there are 38 that still
offer free checking accounts with no strings attached, according to a
new survey by Bankrate, a site that lets consumers compare pricing on
banking products.
Even among the credit unions where
customers have to pay for checking, nearly all offer ways to avoid fees
by meeting certain conditions. For example, consumers can maintain a
minimum balance, set up direct deposit or sign up for electronic
statements.
The survey also found that nearly half
the credit unions do not require a minimum balance to open an account.
Fees rose modestly from last year as well; bounced check fees are up by
about a dollar at $26. ATM fees rose slightly to $2.10, from $2.
Unlike banks, credit unions are member
owned not-for-profits that cater to specific communities, such as a
particular profession, company, university or church.
Still, the steadfast availability of free
checking at more than three-quarters of the surveyed credit unions is in
contrast to the corresponding pullback by banks in the recent times.
Last year, 65 percent of bank checking accounts were free with no
strings attached, down from 76 percent the previous year, according to
Bankrate.
Although free checking remains widely
available at banks, customers increasingly have to meet certain
conditions to have monthly fees waived.
The growing prevalence of fees and
conditions comes as new regulations made checking accounts less
profitable. For starters, overdraft fees can't be charged unless an
accountholder affirmatively chooses to allow such transactions to go
through.
Additionally, federal regulators are
debating a cap on the fees banks and credit unions collect from
merchants whenever customers use their debit cards. The proposed
regulation currently exempts smaller financial institutions with less
than $10 billion in assets from the cap, meaning credit unions would be
less affected than larger banks.
The turmoil in the banking world over the
past few years has helped generate positive attention for credit unions,
which tend to offer more competitive rates on savings accounts, CDs and
other financial products because of their not-for-profit status. Before
consumers start looking for a credit union to join, however, there are
key differences that should be considered.
For example, credit unions tend to have a
more limited menu of services, and may not offer small business or
wealth management services. The number of branches and ATM locations is
likely much more limited as well.
It should also be noted that there are
more than 8,000 credit unions in the country and the fees and services
vary greatly.
Online: For detailed results from the 2011 C.U. Checking Study, see
http://tinyurl.com/6l5g5ey
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