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Though credit unions aren’t entirely opposed to service fees, they are still friendlier to consumers in terms of checking account and overdraft fees, a new Bankrate.com survey found. Of the nation’s 50 largest credit unions, nearly three-quarters still offer free checking accounts with no minimum balance requirement, compared to 45 per cent of banks.
“Overall, 98% of the credit union checking accounts that we surveyed are either free or can become free if the account holder meets minimum balance, direct deposit and/or e-statement requirements,” said Greg McBride, CFA, Bankrate.com’s senior financial analyst.
Credit unions have the edge on fees, though Bankrate reported a 4 per cent drop in the number that offer free checking over last year. In contrast, banks that suffered backlash for ditching free accounts over the last few years are showing signs of retreat. A MoneyRates.com survey released in the spring found 4 per cent more banks brought back free checking.
But credit unions that require a minimum balance for free checking have far lower limits than banks, Bankrate found. Banks typically require as much as $585 for noninterest-bearing accounts and $5,587 for interest-bearing checking accounts. Credit unions are fine with balances in the $100 to $750 range.
Other findings from Bankrate:
Overdraft fees: Credit unions average $26.65, up $0.60 from last year.
Checking account interest: Credit union interest yields for checking accounts have dwindled from 0.12 per cent from 0.17 per cent last year.
If you’re looking for a free checking account, Nerdwallet offers a simple tool to narrow down your options.
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