LAKE FOREST, Ill. (9/17/14)--Consumers have fewer choices in checking accounts, according to a study by Moebs $ervices, but the type offered by credit unions is the most in demand: free.
Only six years ago the number of checking accounts offered was 11 or more, according to the Moebs report. Consumer accounts have quickly evolved to three basic types: interest, free and basic. Banks are moving quickly to interest or basic checking, while credit unions offer mainly free checking.
About 79.6% of credit unions offer free checking, compared with 47.9% of banks, according to the Moebs study, which took place between January and June 2014.
Financial institutions reduce the types of checking to simplify sales and marketing efforts, and also to lessen maintenance costs especially in compliance matters, the Moebs study said. About 97% of financial institutions lose money by offering checking. Banks are moving away from the transaction orientation of free checking and embracing a balance-and-fee approach tied to relationships.
For example, about 78.3% of national banks offer checking with interest but require an average monthly balance to avoid a fee.
For all financial institutions, the price reflected in the balance required to avoid a fee is almost $700 for basic checking. Related fees, if charged, are about $7 per month on average. Interest checking requires almost three times the required balances of basic checking and costs more than $9 per month if charged.