WASHINGTON (4/3/14)--As deposits dwindle and low interest rates on mortgages sap income, more and more banks are pumping up overdraft fees on checking accounts in an attempt to refill their coffers.
In fact, the median fee for overdrawing a checking account at a bank hit a record-high of $30 in 2013, according to an April 2 article in The Wall Street Journal.
Calabasas, Calif.-based Informa Research Services puts the average checking account overdraft fee for banks at $30.70, while credit unions sit at an average charge of $27.74.
The disparity between credit unions and banks only widens when looking at the larger institutions.
Banks with assets greater than $50 billion, or the "Big Banks," carry median overdraft fees of $35, while the largest credit unions--with more than $5 billion in assets--charge a median price of $25, which is 29% lower than banks, according to Mike Moebs, economist/CEO of Moebs Services, the research firm quoted by The Wall Street Journal.
"The best place to have your checking account to avoid fees is at a community bank or credit union," Moebs said in a press release.
Lower overdraft fees aren't the only place where credit unions are leading their banking counterparts in checking. As was widely reported last month, credit unions continue to offer free checking far more regularly than banks.
A survey conducted by Bankrate.com found that 72% of the 50 largest credit unions in the country boast free checking accounts, while the number of banks offering free checking dropped to 38% in 2013 (News Now March 4).