Checking accounts, among the most basic banking tools used by consumers to manage money, have grown increasingly expensive in recent years, and the cost structures of these accounts have become increasingly complex. Yet, it’s not just the monthly maintenance fees that customers must track these days, but also the costs associated with retrieving money from their account, paying bills, transferring money, and even receiving information about their account. With all of the individual transaction level costs, consumers may not even realize how much they are spending on their checking account each year.
Depending upon usage patterns and where one banks, these costs can vary by hundreds of dollars from institution to institution.
The goal of this report is to compare the cost structure of different banks across a number of theoretical consumer usage patterns. To do this, we created five (5) consumer profiles using a variety of banking patterns and chose the most basic, commonly used fees to compare the annual checking account costs of twenty-five (25) of the largest US consumer-facing banks, based on total asset volume as reported by the FDIC.
The general characteristics of each profile are listed below. It’s important to note that these profiles are not based on the usage patterns of any specific bank, nor do they necessarily follow the "average" patterns of all checking account transactions. Rather, they are meant to represent a wide range of banking transactions and consumer patterns and allow us to compare the cost of checking accounts across institutions.
(Please note that the specific monthly and annual transactions used in each consumer profile scenario are listed in the methodology section of this report)
Average Annual Checking Account Costs
Most Affordable Checking Account
Most Expensive Checking Account
Customer A "Old School"
Union Bank/ USAA Federal
Customer B "Young and High Tech"
PNC/ Sovereign/ USAA Federal
Customer C "Cash Strapped"
Customer D "Average Joe"
Customer E "International and On-the-Go"
Average Annual Checking Account Costs Per Scenario
Annual Cost Difference Most Affordable to Most Expensive
- Annual checking account costs can range from $0 to over $700, depending upon your usage pattern and can vary over 350% for those consumers exhibiting the same usage patterns. Therefore, choosing the checking account that best suits your needs is very important.
- USAA had the lowest cost ranking for all five customer scenarios.
- Nevertheless, in general we found that banks with lower costs in one scenario 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 scenario to another. 
- The less money you have, the more it costs to have a checking account. First, for those who allow their accounts to fall below $0, overdraft and insufficient funds (bounced check) 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. (See results for Customer C “Cash-Strapped”)
- Differences in complex overdraft policies make it nearly impossible for borrowers 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 how these fees are applied vary 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.
- Using your checking account to access or send your money outside the U. S. can come with a hefty price. Conversion and flat “international” fees drive up many transaction costs dramatically.
 The average Pearson correlation coefficient of the rankings of all scenarios was 0.27.
Total Annual Fees by Bank and Scenario
Customer A "Old School"
Customer B "Young and High Tech"
Customer C "Cash Strapped"
Customer D "Average Joe"
Customer E "International and On-the-Go"
Bank of America
Bank of the West
BMO Harris Bank
Branch Banking and Trust Company
Citizens Bank/ Charter One
Fifth Third Bank
First Republic Bank
JPMorgan Chase Bank
The Huntington National Bank
USAA Federal Savings Bank
Wells Fargo Bank
*Notes from banks
Bank of America: Bank of America waives the $5 international ATM fee when customers use their debit or ATM card at a Global ATM Alliance member networks. Global ATM Alliance members include Barclays (UK), BNP Paribas (France), BNL D’Italia (Italy), Deutsche Bank (Germany), Scotiabank (Canada and the Caribbean) and Westpac Bank (Australia and New Zealand).
Huntington National Bank: All Huntington consumer checking accounts include 24-Hour Grace® that provides 24 hours for customers to make a deposit and avoid overdraft fees.
Total Annual Checking Account Fees Consumer A 'Old School'
Total Annual Checking Account Fees Consumer B 'Young and High Tech'
Total Annual Checking Account Fees Customer C 'Cash Strapped'
Total Annual Checking Account Fees Customer D 'Average Joe'
Total Annual Checking Account Fees Customer E 'International and On-The-Go'
In this study we analyzed checking accounts with an online application component for twenty-five (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. Where institutions offered multiple checking accounts, we reviewed the basic account with the most affordable monthly maintenance fee for each scenario that also met the following criteria:
a) Must be available to all consumers (cannot be tied to a savings account, require a minimum deposit over $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
c) Must provide branch services (cannot be online only account)
Because we limited our review to these basic accounts, 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, 2013. Some banks reported upcoming changes to product offerings and/or fee structures. Because banks are continuously changing product offerings, it is our policy to review only that information which is available to consumers at the time of data collection.
We gathered the basic information for our report from the websites of each of the twenty-five (25) institutions, and confirmed fee information with each institution with the exception of M&T Bank. Despite multiple attempts to garner verification, M&T did not respond, and the respective information, gleaned from the website and through their customer service lines, could not be definitively confirmed.
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 form 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 2013) that stated, "the percentage of accounts experiencing at least one overdraft or NSF transaction in 2011 was 27%." Additionally the report noted, “the proportion of consumer checking accounts with at least one overdraft or NSF that were heavy overdrafters (… consumers incurring more than ten (10) non-sufficient funds or overdraft transactions during 2011) was 27. 8%." This data helped form our decision to include twelve (12) transactions annually for which Customer C’s account dropped below $0; six (6) debit transactions and six (6) 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 their checking account in a traditional manner, utilizing few of the more modern tools available. Their primary use of the account is to pay their bills with checks. They use their credit card instead of their debit card for purchases. They go to their own bank to withdraw cash once a week (never use another bank’s ATM), keep a minimum balance of $5,000 in their account, and use direct deposit. Customer A always knows exactly how much money they have in their account and never allows their account to fall below $0. They also manage their account with a paper statement.
Customer A Transactions: one (1) monthly maintenance fee (if applicable), no third party ATM fees, no online bill pay, writes eight (8) checks per month, no overdrafts, no wire transfers, paper statements.
Customer B “Young and High Tech”: is a modern consumer and primarily uses the account to pay their bills online, make purchases with their debit card, and retrieve money from ATMs. They typically look for in-house ATMs, but occasionally need to access another bank’s ATM. They have direct deposit of $3,000 per month. Their account occasionally dips below $100 and a few times a year the account goes below $0 leaving them with insufficient funds to pay for several transactions – all debit card related. Because they did not sign up for overdraft protection, those transactions are denied at the point of sale and they are not charged an additional overdraft fee. They manage their account online.
Customer B Transactions: one (1) monthly maintenance fee (if applicable), one (1) out of network ATM per month, pays all bills online, zero (0) checks per month, five (5) Debit Card NSFs per year but does not opt-in to overdraft protection so transactions are denied at point of sale, online statements only.
Customer C “Cash Strapped”: uses her bank account to help manage monthly cash flow. They deposit their checks as they come in (no direct deposit) and their account frequently dips below $0. Customer C opts in to overdraft protection and pays overdraft fees so that their bills and purchases are covered until their next pay check. Four (4) times a year their balance remains below $0 for between five (5) and ten (10) days, during which they incur additional (extended) overdraft fees from some institutions. Because they are often low on funds, they do not have a line of credit or a savings account to cover the overdraft transactions when they occur. They also use the account for other banking features such as ATMs, online bill pay, and check writing. They typically look for in-house ATMs, but occasionally need to access an ATM from another bank. They receive both online and paper statements.
Customer C Transactions: one (1) monthly maintenance fee (if applicable),one (1) out of network ATM per month, pays bills online, writes two (2) checks per month, twelve (12) overdrafts per year (6 debit card, 6 checks), opts-in to overdraft protection without line of credit, triggers extended overdraft fees four (4) times (2 times for 5 days and 2 times for 10 days), online and paper statements.
Customer D “Average Joe”: has direct deposit of $3,000 per month, and uses the account for the typical features - ATM withdrawals, online bill pay, check writing. They typically look for in-house ATMs, but occasionally need to access one at another bank. Occasionally, they unknowingly drop their account below $0 but do not opt-in to overdraft protection. They pay bills online and write checks. They receive both online and paper statements.
Customer D Transactions: one (1) monthly maintenance fee (if applicable), one (1) out of network ATM per month, three (3) check/ACH overdrafts per year, does not opt-in to overdraft protection, pays bills online, writes four (4) checks per month, both paper and online statements.
Customer E “International and On-the-Go” has family overseas and travels one month out of the year to visit them. They primarily use their account to pay bills and send money to their relatives overseas. They have direct deposit of $4,000 per month and do not allow their account to dip below $0. They pay their bills online, write several checks and wire money to their family every other month. When they travel overseas, they use an ATM to withdraw funds. They manage their money using an online bank statement.
Customer E Transactions: one (1) monthly maintenance fee (if applicable), six (6) international outgoing wire transfers per year, five (5) 3rd party ATM withdrawals per year, plus four (4) international ATM withdrawals during one month of international travel (total of 4 per year), writes three (3) checks per month , pays bills online, does not overdraft, online statements.
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: The per check fee we assessed is based on the purchase of the physical checks (not transaction costs which are uncommon). Check costs vary according to style. 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 overdraft protection, 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 and that each exceeds $10.
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.