2014 Checking Account Cost Comparison Report

by Alina Comoreanu

WH Study Statistic Report Badges With all the current costs associated with a basic checking account — from monthly maintenance fees to ATM withdrawal charges to money transfer costs — one can hardly keep track of their growing structural complexity. These days, a customer could even be assessed a fee just for speaking with a bank teller. And those costs can vary by hundreds of dollars depending on several factors, including one’s usage habits and banking institution.

On the heels of WalletHub’s annual Checking Account Transparency Report and to further assist consumers, WalletHub compared the annual costs of 65 checking accounts offered by the 25 largest U.S. consumer-facing banks, based on total asset volume as reported by the FDIC. In order to do so, we constructed five consumer profiles by using a variety of theoretical usage patterns.

Listed below are the general characteristics of each profile, none of which is based on the usage patterns of any specific bank or necessarily follows the "average" patterns of all checking account transactions. Rather, the profiles are intended to represent a wide range of banking transactions and consumer patterns that allow us to compare the cost of checking accounts among various institutions.

Comparison-Chart-2
(Please note that the specific monthly and annual transactions used in each consumer profile scenario are listed in the methodology section of this report.)

Key Findings

 

Cost Difference Most Affordable to Most Expensive

  • The less money you have, the more it costs to have a checking account with the average cost for the “Cash Strapped” segment being close to $500.
    • The reason is twofold. First, overdraft and insufficient funds fees add up rapidly. Secondly, most banks will waive their monthly maintenance fee on basic accounts but only for those who meet direct deposit and/or average minimum daily balance requirements.
  • Using your checking account to access or send your money outside the U.S. can come with a hefty price. Currency conversion fees and other fees drive up costs dramatically with the average cost for this segment being around $327.

Average Annual Checking Account Costs Per Consumer Segment

  • Differences in complex overdraft policies make it nearly impossible for customers to understand which account is more affordable. There are overdraft fees, insufficient funds fees (NSF), extended overdraft fees and overdraft protection lines of credit. And the combination of applied fees varies from bank to bank depending on the type of transaction, the amount of the transaction, and even on the number of days an account stays under $0.
  • Similar to last year, we found that banks with lower costs in one customer segment were not necessarily likely to have lower costs in the rest of the scenarios. In fact, there was low correlation in the rankings of individual banks from one segment to another.[1]

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[1]  The average Pearson correlation coefficient of the rankings of all scenarios was 0.24.

Most & Least Affordable Accounts & Banks

 

Average Annual Checking Account Costs Most Affordable Checking Account Most Expensive Checking Account
Old School $17.85 Capital One 360 Checking -$10.00 Key Express Checking Account $64.80
Young&High Tech $44.37 Santander extra20 Checking -$84.00 First Republic Classic Checking $300.00
Cash Strapped $499.02 Capital One 360 Checking $2.83 M&T Free Checking $735.00
Everyday Joe $151.91 Capital One 360 Checking $4.80 First Republic Classic Checking $396.72
International $327.39 First Republic Classic Checking $184.97 Fifth Third Essential Checking $669.16

 

Overall Institution Ranks

Overall Rank Bank Old School Rank Young and High Tech Rank Cash Strapped Rank Everyday Joe Rank International and on the Move Rank
1 USAA 3 2 2 3 7
2 Capital One 1 2 1 1 15
3 Union Bank 3 6 9 4 7
4 Santander 21 1 10 2 2
5 Citibank 11 9 6 8 4
6 HSBC 14 9 4 11 5
7 BBVA Compass 2 2 12 18 10
8 Huntington 12 6 5 6 24
T - 9 Bank of America 9 9 18 10 9
T - 9 Wells Fargo 7 9 17 9 13
11 JPMorgan Chase 9 6 23 7 12
12 First Republic 6 25 8 25 1
13 Regions 5 9 13 21 18
14 U.S. Bank 8 9 20 12 20
15 BMO Harris Bank 20 9 11 13 17
16 KeyBank 25 9 3 22 14
17 PNC 21 2 24 16 11
18 TD Bank 13 23 14 24 3
19 Bank of the West 17 9 16 20 16
20 BB&T 15 9 19 14 22
21 RBS Citizens 24 20 15 17 6
22 SunTrust 18 9 21 15 21
23 Comerica 16 22 22 5 23
24 Fifth Third 18 24 7 23 25
25 M&T Bank 21 20 25 19 19

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Tips for Finding the Best Checking Account

 

  1. Be Practical: The sheer vastness of checking account fees is telling of the service variety they offer, ranging from ATM withdrawals to paper statements to international wire transfers. As you likely won’t need all of them, it’s best to approach checking accounts in practical terms. When shopping for an account, think of your past usage patterns and evaluate the relevant fees. For instance, will you need a physical checkbook or paper statements? Will your transactions require frequent access to your local bank branch? How often will you need to withdraw cash from a non-bank-owned ATM? Let the answers to such questions guide your selection and dictate which fees to focus on minimizing.
  2. Comparison-Shop: In general, don’t begin with the end in mind. Many consumers enter the shopping process with preconceived notions about their ideal bank as well as its size and services. However, that limits one’s choices to a particular bank’s offers, which may not be the most suitable for the customer’s needs. The best way to find the right checking account is to compare different offers and services from multiple banks, large and small. If the banking institution and checking account meet the majority of your needs, additional amenities and functions won’t matter.
  3. Forget About Debit Card Rewards: Don’t let debit card rewards bias your search for a checking account. Not only are debit card rewards far less common than they were before the Durbin Amendment took effect, but credit card rewards are also up to eight times more lucrative. So, if you really want spending-based rewards, get a rewards credit card with a high earning rate on your biggest everyday expenses.
  4. Carefully Review Account Terms Once you've selected the account that you feel will best suit your needs (or even narrowed down your options to a few finalists), pore through the account agreement(s) with a fine-tooth comb. This is tedious work, but it can pay huge dividends by revealing restrictions and fees that you might otherwise be unaware of prior to experiencing them directly.
  5. Build a Financial Arsenal: Although checking accounts are quite versatile — allowing consumers to receive direct deposits, make debit card purchases, pay bills online and access cash on demand — they cannot be used for everything. An attractive savings account or credit card could fill other needs. Supplementing your checking account with other such types of financial products will enable you to easily and efficiently manage your finances.

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Detailed Findings

  • Capital One’s 360 checking account is the best option for our “Old School” segment because it has the lowest monthly costs and also offers a high APY which helps this consumer segment save money.

Customer A -- Old School

  • For the “Young and High Tech” segment Santander’s extra20 Checking is the best choice because it offers a $20 monthly reward for direct deposits over $1,500 and 2 Bill Pays, added as a bonus directly into your account, every month.

Customer B -- Young and High Tech

  • For the “Cash Strapped” segment, the 360 Checking from Capital One is the best option due to its different approach on overdrafts. Instead of charging overdraft fees they charge an 11.25% APR on the amount a customer overdraws.

Customer C -- Cash Strapped

  • Further confirming how costly overdraft charges are, even in small doses, Capital One 360 is also the best option for “Everyday Joe”.

Customer D -- Everyday Joe

  • When it comes to the “International” segment, the ATM Rebate checking account from First Republic is the best option as it neither charges a debit card foreign transaction fee nor a foreign ATM fee. In addition, it has the lowest international wire transfer fee of all the reviewed accounts.

Customer E -- International and on the Move

Detailed Findings Table

Account Name Customer A "Old School" Customer B "Young and High Tech" Customer C "Cash Strapped" Customer D "Everyday Joe" Customer E "International and on the Move"
Bank of America Core Checking $15.36 $30.00 $597.84 $142.68 $272.26
Bank of America Interest Checking $314.86 $330.00 $753.84 $442.68 $571.76
Bank of America $15.36 $30.00 $597.84 $142.68 $272.26
Bank of the West Signature Checking $359.50 $390.00 $856.00 $515.00 $676.00
Bank of the West Easy Checking $19.97 $30.00 $596.99 $164.98 $323.99
Bank of the West $19.97 $30.00 $596.99 $164.98 $323.99
BB&T Bright Banking Checking Account $19.20 $30.00 $682.80 $147.60 $453.70
BB&T Elite Gold Checking $378.70 $390.00 $898.80 $507.60 $813.20
BB&T Fundamentals Checking $79.20 $90.00 $598.80 $207.60 $513.70
BB&T $19.20 $30.00 $598.80 $147.60 $453.70
BMO Harris Select Checking $22.90 $180.00 $695.85 $296.70 $492.28
BMO Harris Everyday Checking $23.40 $30.00 $545.85 $146.70 $325.28
BMO Harris $22.90 $30.00 $545.85 $146.70 $325.28
Capital One Rewards Checking $15.36 $24.00 $555.24 $136.68 $347.76
Capital One 360 Checking -$0.40 $0.00 $2.83 $4.80 Not Suitable
Capital One High Yield Checking -$10.00 Not Suitable Not Suitable Not Suitable $314.00
Capital One -$10.00 $0.00 $2.83 $4.80 $314.00
Citibank Basic Banking Checking Account $16.80 $30.00 $358.20 $140.40 $262.80
Citibank Account - Checking $256.30 $270.00 $478.20 $380.40 $502.30
Citibank $16.80 $30.00 $358.20 $140.40 $262.80
Comerica Rich Rewards​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ Checking $43.18 $240.00 $604.92 $368.84 $603.88
Comerica Acces Checking $19.68 $107.40 $628.32 $128.84 $471.78
Comrica $19.68 $107.40 $604.92 $128.84 $471.78
BBVA Compass ClearChoice Checking $57.12 $24.00 $619.28 $184.56 $303.92
BBVA Compass ClearConnect Checking $57.12 $0.00 $547.28 $160.56 $293.92
BBVA Compass ClearChoice Premium Checking -$2.50 $180.00 $686.00 $294.00 $463.50
BBVA Compass -$2.50 $0.00 $547.28 $160.56 $293.92
Fifth Third Established Account - Checking $20.16 $204.00 $509.04 $313.08 $753.16
Fifth Third Preferred Account - Checking $288.00 $300.00 $600.00 $399.00 $843.60
Fifth Third Essential Checking $116.16 $120.00 $461.04 $229.08 $669.16
Fifth Third $20.16 $120.00 $461.04 $229.08 $669.16
First Republic ATM Rebate Checking $13.37 $300.00 $483.36 $396.72 $184.97
First Republic Classic Checking $13.44 $300.00 $483.36 $396.72 $193.04
First Republic $13.37 $300.00 $483.36 $396.72 $184.97
HSBC Choice Checking $18.24 $30.00 $424.56 $144.12 $263.34
HSBC Basic Banking - Checking $54.24 $66.00 $280.56 $180.12 $299.34
HSBC $18.24 $30.00 $280.56 $144.12 $263.34
JPMorgan Chase Premier Plus - Checking $299.50 $300.00 $798.00 $402.00 $583.50
JPMorgan Chase Chase Total Checking $15.36 $24.00 $669.84 $133.68 $299.76
JPMorgan Chase $15.36 $24.00 $669.84 $133.68 $299.76
Key Express Checking Account $64.80 $30.00 $481.20 $185.40 $311.30
Key Advantage Checking Account $251.25 $216.00 $576.00 $357.00 $503.25
Key Coverage Checking Account $208.80 $174.00 $217.20 $224.40 $455.30
Key Bank $64.80 $30.00 $217.20 $185.40 $311.30
M&T Free Checking $24.00 $36.00 $735.00 $163.50 $338.00
M&T Basic Checking $60.00 $72.00 $771.00 $199.50 $374.00
M&T My Choice Checking $24.00 $36.00 $818.40 $163.50 $338.00
M&T $24.00 $36.00 $735.00 $163.50 $338.00
PNC Virtual Wallet - Checking $23.50 $30.00 $674.00 $150.00 $311.00
PNC Performance Checking $47.70 $0.00 $740.00 $144.00 $298.70
PNC Bank Standard Checking $24.00 $30.00 $674.00 $150.00 $311.50
PNC $23.50 $0.00 $674.00 $144.00 $298.70
RBS Citizens One Deposit Checking $46.08 $36.00 $583.38 $176.04 $267.68
RBS Citizens Value Checking $47.88 $47.88 $565.74 $152.88 $292.28
RBS Citizens Personal Checking with Interest $45.58 $179.88 $727.26 $319.92 $267.18
RBS Citizens $45.58 $36.00 $565.74 $152.88 $267.18
Regions LifeGreen Checking $48.00 $30.00 $588.00 $174.00 $335.50
Regions LifeGreen eAccess Account $174.00 $126.00 $588.00 $180.00 $431.50
Regions LifeGreen Simple Checking Account $108.00 $90.00 $552.00 $234.00 $395.50
Regions LifeGreen Preferred Checking Account $12.00 $246.00 $681.00 $360.00 $547.00
Regions Bank $12.00 $30.00 $552.00 $174.00 $335.50
Santander Flat Fee Basic $84.00 $102.00 $598.00 $219.00 $370.50
Santander Classic Checking $24.00 $36.00 $652.00 $153.00 $312.00
Santander extra20 Checking $24.00 -$84.00 $532.00 $33.00 $192.00
Santander Preferred Plus Banking $24.00 $0.00 $676.00 $117.00 $297.00
Santander $24.00 -$84.00 $532.00 $33.00 $192.00
SunTrust Bank Everyday Checking $20.16 $30.00 $623.04 $148.08 $364.06
SuntTrust EZ Checking $104.16 $114.00 $623.04 $148.08 $448.06
SunTrust Balanced Banking $20.16 $174.00 Not Suitable Not Suitable $508.06
SunTrust $20.16 $30.00 $623.04 $148.08 $364.06
TD Bank TD Simple $104.42 $107.88 $565.02 $235.15 $346.58
TD Bank TD Premier Checking $18.04 $300.00 $745.14 $415.27 $245.20
TD Bank TD Convenience Checking $32.54 $216.00 $673.14 $343.27 $274.70
TD Bank $18.04 $107.88 $565.02 $235.15 $245.20
Huntington Asterisk-Free Checking $17.28 $24.00 $354.32 $130.64 $498.48
Huntington Plus Checking $196.03 $204.00 $534.32 $310.64 $677.23
Huntington $17.28 $24.00 $354.32 $130.64 $498.48
U.S. Bank Easy Checking $14.40 $30.00 $623.00 $145.20 $351.90
U.S Bank Silver Checking $14.40 $30.00 $623.00 $145.20 $351.90
U.S Bank Gold Checking $14.40 $131.40 $671.00 $270.60 $465.80
U.S. Bank $14.40 $30.00 $623.00 $145.20 $351.90
Union Bank Baking By Design $12.00 $24.00 $516.00 $135.00 $270.00
Union Bank Ready to Go Checking $0.00 $24.00 $564.00 $123.00 $270.00
Union Bank $0.00 $24.00 $516.00 $123.00 $270.00
USAA Secure Checking Plus Account $119.40 $119.40 $269.40 $194.40 $389.40
USAA Secure Checking $0.00 $0.00 $150.00 $75.00 $270.00
USAA $0.00 $0.00 $150.00 $75.00 $270.00
Wells Fargo Value CheckingWay2Save $13.44 $30.00 $597.36 $141.72 $307.54
Wells Fargo Value Checking $13.44 $66.00 $597.36 $177.72 $343.54
Wells Fargo $13.44 $30.00 $597.36 $141.72 $307.54

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Methodology

 

In this study we analyzed checking accounts with an online application component for 25 of the largest US consumer-facing banks with a retail presence based on total asset volume as reported by the FDIC. Banks without physical branches (online only) were excluded from the study. We considered only checking accounts that offer consumers a physical checkbook but it’s important to know that certain types of consumers would be better off with prepaid cards or alternative checking account products (such as SafeBalance from Bank of America with an annual cost of $89.40 annually for Cash Strapped), which was outside the scope of this report. Where institutions offered multiple checking accounts, we reviewed all relevant accounts and presented the costs of the most affordable one for each scenario that also met the following criteria:

a.) Must be available to all consumers (must not require a minimum opening deposit over $2,500, or be for students or seniors only)
b.) Must provide all of the services (including check writing) that would be necessary to meet the transactions of each scenario

It is possible that consumers with usage patterns similar to those in our scenarios would benefit from alternative account offerings, or by combining overdraft protection with a line of credit or a linked savings account at many of the institutions reviewed.

All account information collected was current as of August 22, 2014.

We gathered the basic information for our report from the websites of each of the 25 institutions, and confirmed fee information with each institution with the exception of PNC and Santander Bank who refused to participate in the data verification process and BB&T along with JPMorgan Chase, that could not meet our deadline.

Usage Patterns for Consumer Profiles

The goal of this report is to compare the cost structure of different banks across a number of theoretical consumer usage patterns. However, these profiles are not meant to mimic the particular usage patterns observed by any one bank or even to follow the average transactions of all checking accounts. Instead, we tried to capture a wide range of usage patterns and common fees in our profiles.

Where possible, we did use existing data to inform our methodology. For example, overdraft fees are one of the most costly expenses checking account consumers can encounter. We therefore wanted to ensure that we showed the cost of multiple overdraft fees in our profile without over representing the cost or risk of these fees. In creating our “Cash Strapped” profile, we relied on data from a recent CFPB report (June 2014) that stated, "…a relatively small number of account holders are responsible for most overdrafts, with 8.3 percent of account holders who overdraft more than 10 times per year responsible for 73.7 percent of overdraft fees. A majority of accounts, 69.8 percent, do not incur any overdrafts, and 82.3 percent of accounts incur 3 or fewer overdrafts." Additionally the report lists that the average annual charge for overdrafts alone for this consumer segment to be $380.40. This data helped inform our decision to include 12 transactions annually for which Customer C’s account dropped below $0; six debit transactions and six check or ACH transactions. It also lead us to leave three out of the five total scenarios free from all overdraft fees.

We also tried to represent a variety of types of transactions and common fees that consumers might encounter, depending upon one’s financial profile and banking patterns. Below we have listed the description of each profile as well as the specific transactions that composed the calculations.

Customer A “Old School”: uses her checking account in a traditional manner, utilizing few of the more modern tools available. Her primary use of the account is to pay her bills with checks. She uses her credit card instead of debit card for purchases. She goes to her own bank to withdrawal cash once a week (never uses another bank’s ATM), keeps a minimum balance of $5,000 in her account, and uses direct deposit. Customer A always knows exactly how much money she has in her account and never allows her account to fall below $0. She manages her account with a paper statement.

Customer A Transactions: 1 monthly maintenance fee (if applicable), no third party ATM fees, no online bill pay, writes 8 checks per month, no overdrafts, no wire transfers, paper statements, uses credit card.

Customer B “Young and High Tech”: is a modern consumer and primarily uses the account to pay his bills online, make purchases with his debit card (9 per month), and retrieve money from ATMs. He typically looks for in-house ATMs but occasionally needs to access another bank’s ATM. He has direct deposit of $3,000 per month. His account occasionally dips below $100 and a few times a year the account goes below $0 leaving him with insufficient funds to pay for several transactions – all debit card related. Because he did not sign up for debit card overdraft, those transactions are denied at the point of sale and he is not charged an overdraft fee. He manages the account online.

Customer B Transactions: 1 monthly maintenance fee (if applicable), 1 out of network ATM per month, pays all bills online, 0 checks per month, 5 debit card NSFs per year but does not opt-in to debit card OD so transactions are denied at point of sale, online statements only, uses debit card 9 times per month.

Customer C “Cash Strapped”: uses her bank account to help manage monthly cash flow. She deposits her checks as they come in (no direct deposit) and her account frequently dips below $0.00. Customer C opts in to debit card overdraft and pays overdraft fees so that her bills and purchases are covered until her next pay check. Four times a year her balance remains below zero for between 5 and 10 days, during which she incurs additional “extended” overdraft fees from some institutions. Because she is often low on funds, she does not have a line of credit or a savings account to cover the overdraft transactions when they occur. She also uses the account for other banking features such as ATMs, online bill pay, and check writing. She typically looks for in-house ATMs but occasionally needs to access an ATM from another bank. She receives both online and paper statements and uses her debit card only 9 times a month.

Customer C Transactions: 1 monthly maintenance fee (if applicable),1 out of network ATM per month, pays bills online, writes 2 checks per month, 12 overdrafts per year (6 debit card, 6 checks), opts-in to debit card OD without line of credit, triggers extended OD fee 4X (2X 5 days and 2X10 days), online and paper statements, uses debit card 9 times per month.

Customer D “Everyday Joe”: has direct deposit of $3,000 per month, and uses the account for the typical features: ATM withdrawals, online bill pay, check writing. He typically looks for in-house ATMs but occasionally needs to access one at another bank. Occasionally he unknowingly runs his account below $0 but does not have overdraft protection. He pays bills online and writes checks. He receives both online and paper statements and uses his debit card 17 times per month.

Customer D Transactions: 1 monthly maintenance fee (if applicable), 1 out of network ATM per month, 3 check/ACH overdrafts per year, does not opt-in to OD protection, pays bills online, writes 4 checks, both paper and online statements, uses debit card 17 times per month.

Customer E “International and on the Move”: has family overseas and travels one month out of the year to visit them. He primary uses his account to pay bills and send money to her relatives overseas. He has direct deposit of $4,000 per month and does not allow his account to dip below $0. He pays his bills online, writes several checks, wires money to his family every other month and uses his credit card rather than his debit card. When he travels overseas he uses an ATM to withdrawal funds. He manages his money using an online bank statement.

Customer E Transactions: 1 monthly maintenance fee (if applicable), 6 international outgoing wire transfers per year, 5 3rd party ATM per year, plus 4 international ATM withdrawals during one month of international travel (total of 4 per year), writes 3 checks per month , pays bills online, does not overdraft, online statements, uses credit card.

Fee Assumptions
ATM Fees: We did not include the cost of non-owner ATM surcharges in our calculation. To calculate the International ATM charges, we included both the flat international ATM fee and the conversion percentage fee. Conversion fees listed in percentages have been calculated based on the assumption that Customer E withdraws $200 on each withdrawal.

Per Check Fee: Check costs vary according to style. The per check fee we assessed is based on the purchase of the physical checks (not transaction costs which are uncommon). To calculate a per check fee, we divided the cost of the most basic box of checks by the total number of checks in each box. We excluded “first box free” orders.

Overdraft/ NSF Fees: Include both those assessed when the bank covers the transaction as well as NSF fees where the bank does not cover the transaction. Where we assume that the consumer has “opted in” to debit card overdraft, we assume they have chosen to have the bank pay for transactions for which they do not have enough money in their account to cover the full amount of the transaction (and not have their transactions rejected at point of sale). None of our scenarios have overdraft plans that tie their account to a line of credit or savings account. Additionally, we assume that none of the overdraft transactions that take place during the course of a year happen on the same day, that each exceeds $10.00 and the overdrawn amount to be $50.

Online/ Paper Statements: Two of our customer scenarios include both a paper and an online statement. In those instances where banks do not offer customers the option to receive both online and paper, we assumed the consumer would choose to receive a paper statement. If they had separate fees for both online and paper statements we have taken both into the account where the scenario mentioned both.

Wire transfer fees: When an online wire transfer fee was available, we chose to use that fee over a branch fee for customer E.
Interest bearing accounts: We applied the APYs offered by these types of accounts to the balance assumptions of each scenario. Based on the amount yielded, we have offset the total monthly cost for the respective scenarios.

NOTE: We have only used on-going fees and features related to accounts, for example the first checkbook offered for free or limited time bonuses (APY or cash) will not be reflected into our total cost assessment.
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Author
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Alina is a Research Analyst at Evolution Finance. She is a Business Administration graduate. Previously she worked as a desktop publisher for a daily newspaper and for the National Census&Statistical…
100 Wallet Points
If Customer A doesn't use ATM's or online banking, how could Capital One 360's checking account be labeled the most affordable for them? They would never sign up for that account based on their profile.
Sep 4, 2014  •  Reply  •  Flag