Karen Bennett | (TNS) Bankrate.com

Accessing the money from your checking or savings account keeps getting more expensive, if you’re using an out-of-network ATM. In fact, average total ATM fees continue their climb to $4.77 this year, according to Bankrate’s 2024 checking account and ATM fee study. This reflects an increase from $4.73 last year and the highest annual amount since Bankrate began tracking ATM fees in 1998.

“If you make an out-of-network ATM withdrawal, expect to pay, and pay more than ever before,” says Greg McBride, CFA, Bankrate chief financial analyst. “Fees have increased again and you’ll typically pay two fees — one to the ATM owner and another to your own bank. Confine cash withdrawals to in-network ATMs or get cash back when using a debit card. See if your bank participates in a nationwide ATM network that can be used free of charge,” McBride adds.

Other bank fees on the rise include overdraft fees, Bankrate found, with the average having climbed this year to $27.08, up from $26.61 in 2023. This increase comes after two straight years of declines, after the average overdraft fee had peaked at $33.58 in 2021. Overdraft fees are still charged by 94% of accounts, Bankrate surveyed, and they can run as high as $38.

Meanwhile, it may be getting harder to avoid monthly service fees for interest-earning checking accounts, with the average minimum balance required to waive such a fee climbing to a record high of $10,210, Bankrate’s survey found.

Like last year, a particular bright spot from this year’s survey data is that free checking accounts are still easy to obtain: Nearly half (47%) of non-interest accounts charge no monthly service fees, while another 46% allow customers to avoid the fee by setting up regular direct deposits.

Key insights from Bankrate’s 2024 checking account and ATM fee study

ATM fees: Combined charges reach all-time high

When a consumer uses an ATM that’s not in their bank’s network, there are two charges that can result. The ATM owner may impose a surcharge, while the consumer’s own bank may also charge an out-of-network ATM fee.

Surcharges continue to rise: In 2024 (and in every year since 2019), 100% of the banks Bankrate surveyed said they charge non-customers for using their ATMs. This year, the average surcharge has climbed to a record high of $3.19, with increases in surcharge amounts outnumbering decreases by a 4-to-1 margin.

Average out-of-network fee holds steady: Meanwhile, the average out-of-network ATM fee remains unchanged from last year, at $1.58, and it’s charged in 61% of cases, Bankrate’s survey found. Among the banks charging this fee, the most common amount is $3, while 39% of banks surveyed have at least one account offering free out-of-network withdrawals.

Combined ATM charges climb to a new record: Together, the total average cost for using an out-of-network ATM is now $4.77, which is up for the fourth consecutive year and the highest amount since Bankrate began the survey in 1998. This combined fee consists of the average charge from one’s own bank and the average surcharge assessed by an ATM-owning bank.

Average ATM fees highest in Atlanta, lowest in Boston

Among the metropolitan areas Bankrate surveyed, the place with the highest combined average ATM fees in 2024 is Atlanta, where you’ll pay an average of $5.33. Atlanta also saw the highest average combined fees in 2023 and 2022, of $5.33 and $5.38, respectively.

Meanwhile, the metro areas of San Diego and Phoenix are tied in 2024 for the second highest average combined ATM fee, of $5.22.

Of the 25 metro areas Bankrate surveyed, the places with the lowest average combined ATM fees are Boston ($4.16), Seattle ($4.34) and Philadelphia ($4.42).

Overdraft fees are back on the rise, while NSF fees continue decline

When a bank’s customer attempts a transaction yet doesn’t have enough funds to cover it, the bank may impose one of two fees. It could charge an overdraft fee while loaning the customer the funds to cover the transaction. Alternatively, it could charge an NSF fee while denying a payment or a check’s cashing that would have brought the account to a negative balance.

Overdraft fees have risen over last year: After the average overdraft fee declined for two straight years, it has now climbed to $27.08 in 2024, up 1.7% from $26.61 in 2023. This increase also comes after the average overdraft fee hit its lowest level in nearly two decades last year. Among banks surveyed in 2024, overdraft fee increases outnumbered both fee decreases and fee eliminations. Nearly all accounts (94%) charge overdraft fees, Bankrate’s survey revealed.

The Consumer Financial Protection Bureau (CFPB) reports banks appear to have stopped significantly reducing overdraft fees. Meanwhile, the agency has proposed a rule that would lower overdraft fees at banks with over $10 billion in assets. The rule would mean around 175 banks and credit unions could still offer overdraft services, but they could only charge fees ranging from $3 to $14 — or they could determine a fee to break even.

NSF fees are down for the third straight year: The average NSF fee in 2024 dropped to $17.72, which is the lowest in the history of Bankrate’s survey, and down 11% from last year’s $19.94. More than one-third of accounts (36%) don’t charge any NSF fee, up from 30% last year; in fact, decreases in NSF fees outnumbered increases by a 2-to-1 margin.

Most banks still charge either overdraft fees or NSF fees: Only 6% of banks don’t charge either an NSF fee or an overdraft fee. Among the banks that charge these fees, however, 66% provide some latitude before charging full fees, which is up from 62% from last year. The amount of latitude banks provide varies widely, allowing customers to overdraw between $1 and $100 before the full fee is assessed.

Most banks don’t offer early direct deposit: If you’re on a tight household budget or trying to avoid overdrafts, you may find early direct deposit comes in handy. However, only 21% of banks surveyed said they offer two-day early access to direct deposit. (This is the first year this question was included in Bankrate’s survey.)

Interest checking: Minimum balance to avoid fees is soaring

Interest-bearing checking accounts often come with monthly service fees, and this year’s average fee is $15.45, up from $15.33 in 2023. Many accounts waive the monthly fee if you maintain a set minimum balance. However, these requirements can be steep, with the average now at a record high of $10,210, Bankrate’s survey found.

This year’s average monthly fee is up 18% from last year, when the average was $8,684, and it reflects a 35% increase over the average of $7,550 in 2020. The balance requirement to avoid fees on interest checking accounts has increased at an average annual rate of 7.5% since Bankrate began the survey in 1998.

As far as rates, the average yield on interest checking is 0.06% APY in 2024, a scant increase from last year’s 0.05% APY.

Non-interest checking: Most accounts charge no service fees or make them easy to avoid

Nearly half (47%) of non-interest accounts are free, Bankrate’s survey found. Free checking accounts are ones that don’t charge a monthly service fee, regardless of your balance.

This year’s figure is up slightly from 45% in 2023.

Currently, an additional 46% of non-interest accounts will waive the fee based solely on direct deposit. As such, 93% of non-interest accounts surveyed by Bankrate are either free or can become free simply by having a regular direct deposit into the account.

Among checking accounts that don’t bear interest, the average monthly service fee is $5.47 in 2024, up from $5.31 last year and the highest average since 2019.

Tips for avoiding bank fees

Charges such as ATM fees and monthly service fees can add up quickly, eating away at your balance and any interest you’ve been earning. A little planning, and sometimes choosing the right bank, can help keep you from paying such bank fees.

ATM fees

While electronic payments may be the most convenient option these days, you may occasionally find yourself in need of cash. For instance, some people prefer to use cash when giving gifts or splitting a restaurant check with friends.

Ways you can take out cash without having to pay for it include:

• Only use ATMs in your bank’s network. If you find yourself using ATMs frequently, it could pay to choose a big bank that operates plenty of ATMs. Alternatively, you could go with a bank that belongs to a large ATM network such as Allpoint or MoneyPass.
• Choose a bank that reimburses ATM fees. Financial institutions offering accounts that reimburse ATM fees, all or in part, include: Alliant Credit Union, Ally Bank, Axos Bank, Charles Schwab Bank, EverBank, LendingClub, Navy Federal Credit Union
• Request cash when making debit card purchases. Most retailers allow you to obtain cash back from your checking account when you use your debit card at the cash register. There’s usually no fee for doing this, although maximum withdrawal limits are often lower than those imposed by ATMs.

Monthly maintenance fees

It pays to go with an account that charges no monthly service fees, or else to find one that makes such fees easy to avoid.

• Find a free checking account. Such accounts won’t charge you monthly maintenance fees, regardless of your balance. Nearly half of the checking accounts Bankrate surveyed are free with no strings attached.
• Choose an account with a fee that’s easy to avoid. Among the non-interest checking accounts that do charge a service fee, many will waive the fee for customers who set up regular direct deposit into the account.

McBride advises putting your excess cash into an online-only savings account earning a high yield, rather than keeping it in a low-yielding checking account just to avoid paying a monthly fee.

Overdraft and NSF fees

With overdraft fees on the rise again, it helps to know your bank’s policies regarding overdrawing an account, including any associated charges. Ways to avoid these fees include:

• Find an account that doesn’t charge overdraft or NSF fees. With such an account, the bank simply denies any transaction that would overdraw the account. This way, you won’t have to worry about paying back the bank and paying the penalty. Conversely, this could also result in hardship or embarrassment when you’re denied a purchase.
• Set up overdraft protection. Offered by many banks, overdraft protection prevents an overdrawn account by initiating an automatic transfer from a savings account, credit card or line of credit. Note that while this service is often free, some banks do charge a fee when this transfer takes place.
• Check your account balance frequently. Knowing how much is in your checking can help you make an informed decision before reaching for your debit card, especially for nonessential purchases. Setting up low balance alerts through your banking app can help do the work for you.

(Visit Bankrate online at bankrate.com.)

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