Here’s the Easiest Way to Avoid Annoying Bank Fees

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Paying fees to an institution for simply holding your cash and providing accessibility seems counterintuitive in the land of competition. Yet that’s exactly what happens when Americans don’t shop around for bank accounts. Despite the availability of free checking, the nation’s financial system continues to siphon a record amount of fees from customers.

Being nickeled and dimed on your checking account adds up to more than just chump change. During the latter half of 2014, the average monthly maintenance fee increased $0.18 to a new record high of $12.87, according to a new analysis from MoneyRates.com, which looks at the nation’s 50 largest retail banks by deposits, plus an equal number of smaller financial institutions. In fact, the average checking account costs $154.44 per year to maintain before accounting for any usage fees users might incur.

Free checking accounts are still available at some financial institutions, but they are becoming scarce. The percentage of checking accounts with no monthly maintenance fees fell to 26% in 2014, the lowest percentage measured by the survey since it began in 2009. Adding insult to injury, the average minimum balance required to qualify for a waiver of the monthly maintenance fee jumped $268.76 over the past six months to $5,708.76, a staggering amount for the millions of Americans living paycheck to paycheck.

What’s the easiest way to avoid annoying bank fees? Shop around. Sixty-three percent of online checking accounts don’t charge a monthly maintenance fee. They also typically charge less than traditional banks in regard to overdraft fees and ATM fees. Account minimums are more manageable with online checking accounts, making banking more accessible to lower-income customers. Online checking accounts require an average of just $90.21 to open, compared to $361.08 for traditional accounts.

If you prefer to bank in person, shop around at credit unions. A new survey from Bankrate.com finds that 72% of America’s largest credit unions still offer standalone free checking accounts. An additional 26% of credit unions offer checking accounts that become free if certain requirements are met. Furthermore, 62% of the credit union checking accounts surveyed do not have a minimum opening deposit requirement, and no account requires more than $100.

While changing banks can be an inconvenience, signs are emerging that consumers are willing to walk away from annoying fees and traditional banking. JPMorgan Chase recently revealed plans to close about 300 bank branches over the next two years as Americans shift toward cheaper, online alternatives.

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