Since the Regulation E went into effect in August, Banks have taken a huge hit to their fee income. While the regulation is great for the consumers’ wallet, it hasn’t helped the banking industry. Before the regulation, banks were making a lot of money with fee income, and that went away when banks stopped allowing customers to overdraw their account without their consent. As an effect of the regulation and the drop in fee income, I’m betting that free checking accounts will soon become a thing of the past. I’ve got a couple theories of what will happen to free checking accounts.
Current Checking Accounts
Currently banks offer many different types of checking accounts. The most popular type is the free checking, which normally doesn’t require a minimum balance. Other checking accounts may provide benefits, such as free checks, free cashier’s checks and money orders, and bonus rates on certificates of deposit. While these type of checking accounts provide additional benefits that the free checking accounts don’t, they also normally require minimum balances.
“Free” Checking Accounts in the future
As it’s been in the past, free checking accounts have had no stipulations, and many came with a package of benefits. Free online banking, online bill pay, a free check card, no minimum balance, and no monthly maintenance fees. In the future, I think banks will start charging for some or all of these items. My guess is that banks will either require minimum balances or charge for items ala carte. For instance, if you want online banking, it may cost you $1 a month. Add on bill pay, and that may be another $1 a month.
As it is currently stands, we have two checking accounts. I use one as our “secret account” that I transfer half the mortgage payment into each time my husband gets paid. If it does change where they require a minimum balance, I’ll probably end up opening an Electric Orange checking account with ING. I’m hoping there will always be free checking accounts, because fees are not something I want to pay each month!
I’m probably going to look into other banks’ checking accounts. Of course, they could change their stipulations too, so I may be in the same boat as if I just stay with our current bank, so who knows if that will do me any good. I may just go ahead and open the ING Electric Orange checking so I’ve got that account established in the event that I want to make that our main account. The only drawbacks are that the ATMs for ING are not close to our house at all, so I’d have to do weird things to avoid ATM fees.
I’m really hoping that banks don’t start charging outrageous fees just to have checking accounts. It’s necessary for so many people to have a checking account, and I know that no one wants to pay just to keep an account at a bank. Bank fees are no fun at all!
Have you heard anything about free checking accounts changing?