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Survey finds overdraft, non-sufficient funds charges are down, ATM charges up

ByEditorialTeam

Sep 1, 2022

Overdraft and non-sufficient funds (NSF) charges are down from 2021, although many banks proceed to cost them. In the meantime, mixed ATM charges reached a three-year excessive.

The typical overdraft price in 2022 decreased 11% to $29.80 from the record-high common of $33.58 in 2021, Bankrate.com’s annual Checking Account and ATM Payment research printed Wednesday reported. That’s the lowest it has been since 2009.

Bankrate.com additionally discovered the typical NSF price went down 21%, from a file $33.58 in 2021 to $26.58 this yr, which is the bottom it has been since 2004.

Some banks, together with Financial institution of America, Capital One and Citibank, have both lowered or gotten rid of overdraft or NSF charges. Regardless of these strikes, such charges stay prevalent, with 96 p.c of accounts surveyed nonetheless charging for overdrafts and 87% nonetheless doing so for NSF, in response to Bankrate.com.

A Financial institution of America ATM is seen in Winchester, Massachusetts, on Feb. 3, 2021. (AP Photograph/Elise Amendola / AP Newsroom)

“The identical recommendation for avoiding overdrafts nonetheless applies,” Greg McBride, Bankrate’s chief monetary analyst, mentioned in an announcement. “Monitor your out there account steadiness earlier than initiating transactions, arrange a hyperlink to a financial savings account with a modest steadiness that can be utilized to cowl the shortfall, and arrange alerts through e mail or textual content to inform you if the steadiness will get under a sure threshold so you may proactively keep away from having your cost declined.”

Overdraft charges can differ primarily based on the place somebody lives, with Miami having the bottom common, $21.05, and Pittsburgh having the best, $35.50, the research discovered.

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In the meantime, the mixed ATM charges whole — the one charged by a buyer’s personal financial institution for utilizing an out-of-network ATM and the one charged by the ATM proprietor — hit $4.66 in 2022, a three-year excessive, Bankrate.com reported.

In 2022, the typical price banks levied in opposition to their very own clients for utilizing out-of-network ATMs was $1.52, up one cent from final yr. The price banks charged for non-customers to make use of their ATMs hit a brand new file excessive of $3.14, a rise of 1.5%, in response to Bankrate.com.

“Staying inside your financial institution’s ATM community is the sure-fire solution to keep away from charges,” McBride mentioned. “If going outdoors the community, you run the chance of being hit with charges from each your financial institution and the ATM-owning financial institution.”

Listed here are the 5 cities with the best common whole ATM charges:

  • Atlanta: $5.38
  • Detroit: $5.29
  • Phoenix: $5.24
  • Cleveland: $5.23
  • Pittsburgh: $4.98

Listed here are the 5 with the bottom:

  • Los Angeles: $4.21
  • Seattle: $4.23
  • Minneapolis: $4.24
  • Cincinnati: $4.27
  • Boston: $4.35

The follow of getting money again when trying out with a debit card at a grocery retailer or different collaborating store may also assist with avoiding ATM charges, in response to Bankrate.com.

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Along with taking a look at overdraft, NSF and ATM charges, Bankrate.com’s annual research additionally examined the charges related to curiosity and non-interest checking accounts.

OAKLAND, CA - OCTOBER 13: A customer uses an ATM outside of a Chase bank office on October 13, 2011 in Oakland, California. JPMorgan Chase & Co. a nearly 33 percent decline in third quarter profits with earnings of $3.1 billion compared to $4.71 billion one year ago. (Photo by Justin Sullivan/Getty Images)

A buyer makes use of an ATM outdoors a Chase financial institution workplace in Oakland, California, on Oct. 13, 2011. (Justin Sullivan/Getty Photographs)

Curiosity checking accounts averaged a month-to-month price of $16.19, a roughly 1% lower from 2021, in response to Bankrate.com. The typical steadiness required to keep away from the month-to-month price additionally went down barely, from $9,896 to $9,658, however remained above 2020’s common of $7,550.

Three-quarters of curiosity checking accounts require some type of steadiness requirement. The proportion of curiosity checking accounts that can waive the price primarily based on direct deposit elevated by 3 factors from 2021 to fifteen%. In the meantime, the proportion of free curiosity checking accounts remained unchanged from 2021: 7%.

Bankrate.com discovered the month-to-month common price for non-interest checking accounts to be $5.44, a 7% enhance from final yr and the best it has been since 2019. The typical steadiness requirement to keep away from the charges is $539.04, up 6.4%.

53% of non-interest checking accounts will waive the month-to-month price primarily based on direct deposit, account steadiness, transaction exercise or a mixture thereof. About 99% of those accounts are free or can grow to be free, with the predominant price waiver being direct deposit (44%).

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About 46% of non-interest checking accounts shouldn’t have a month-to-month price or a steadiness requirement. That determine is down two factors from final yr.

Two methods to keep away from month-to-month checking account charges are to keep up the minimal steadiness or make the most of direct deposit. If an individual cannot meet their financial institution’s necessities to waive the charges, they will keep away from them by switching to a monetary establishment that provides free checking accounts, in response to Bankrate.com.

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