March 25, 2023

Bucks Blog: Free Checking Still Widespread at Credit Unions

Nearly three-quarters of the country’s largest credit unions still offer no-strings-attached free checking accounts, a new report from finds.

By comparison, fewer than half of banks — 39 percent — offer “stand-alone” free checking accounts, which are those that have no requirements, like direct deposit or minimum balances, to avoid fees, according to Bankrate’s report on bank checking accounts released last fall.

The latest findings come from a survey of the 50 largest credit unions, based on total deposits, from Jan. 15 to 28. Thirty-six of the 50 offered free checking. Half had no minimum opening deposit requirement, and none had a minimum opening deposit of more than $100.

The availability of free checking at credit unions has declined modestly since 2010, but has “plummeted” at banks, according to Bankrate. Free checking, in fact, “remains the rule, rather than the exception” at credit unions, Greg McBride, Bankrate’s senior financial analyst, said in a statement.

The average credit union A.T.M. surcharge — the fee a machine operator charges a noncustomer — climbed to $2.29, from $2.08 last year. (The average bank A.T.M. surcharge is $2.50.)

Surcharges are nearly universal among both banks and credit unions, with $2 and $3 the most common charges at credit unions and $3 the most common at banks, the report found.

A.T.M. surcharges are different from the fees an institution may charge its own customers for making a withdrawal at an out-of-network A.T.M. The most common out-of-network fees are $1 and $1.50 at credit unions, and $2 at banks.

Further, the average “nonsufficient funds” charge at credit unions is about $27 at credit unions, compared with $31 at banks.

Do you use a free checking account at a credit union?

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Bucks Blog: Improvement Seen in Prepaid Cards for Jobless Benefits

Many states have made progress in reducing fees that can eat away at unemployment benefits delivered on prepaid debit cards, a report from the National Consumer Law Center finds.

But five states still do not offer jobless workers the option of having their benefits deposited directly into a bank account, which the center says violates federal law.

Changes since the center’s first report on the issue in 2011 have saved unemployed workers millions of dollars in fees over all, the center says. Eighteen states have reduced card fees for A.T.M. withdrawals and purchases, and just three cards get a “thumbs down” from the center in the new report, down from 16 in the initial analysis.

But there is still room for improvement, since many cards still carry fees that out-of-work Americans can ill afford, said Lauren Saunders, managing lawyer at the center and an author of the report. Some states make it hard to find out just what fees are charged, and under what circumstances.

“There are still too many fees,” she said, citing instances in which workers must pay to check their balances and contact customer service, even if they do not speak with a live representative. Well-designed prepaid cards are safer, cheaper and more convenient than paper checks, she said, but direct deposit to a bank account of the recipient’s choosing is still the best option.

Practices and fees vary because jobless benefits are distributed at the state level, and each state negotiates terms with card companies.

Roughly 5.7 million people were receiving unemployment assistance as of Jan. 5, according to federal data. (The unemployment rate stood at 7.8 percent at the end of 2012, with 12.2 million people out of work.)

The report found the ease of signing up for direct deposit of unemployment benefits varies. Some states encourage workers to sign up for direct deposit as the first choice, while others automatically enroll them for prepaid cards and make them take extra steps to unenroll from the cards and enroll in direct deposit. While prepaid cards, in general, are often used by people who lack conventional bank accounts, unemployed workers previously received a paycheck, so many are likely to have a bank account available, Ms. Saunders said.

Minnesota had the highest direct deposit rate, at 82 percent, while Arizona had the lowest, at 16 percent.

California, Indiana, Kansas, Maryland and Nevada do not offer the option of direct deposit, even though federal law requires them to do so, the report says.  In California, Kansas and Maryland, workers can set up automatic transfers from a card to a bank account, but fewer than a quarter do so — perhaps because it results in a delay of one to four days in getting their money.

U.S. Bank, the only bank that charged overdraft fees in the previous survey, has eliminated them. Pennsylvania made changes to its card program that have saved unemployed workers more than $5 million.

As a result of the changes, Pennsylvania’s card, issued by JPMorgan Chase, joined top-ranked cards in California and New Jersey, both issued by Bank of America. The three cards earned “two thumbs up” from the center because they offer benefits like free in-network A.T.M. withdrawals and lack “junk” charges, like inactivity fees.

The three states receiving a “thumbs down” for their cards were Alaska, Indiana and Iowa.

Do you receive unemployment benefits on a prepaid card? What has been your experience? Do you feel the fees are excessive?

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Bucks Blog: Credit Union Pledges Fee-Free Checking for Life

A Long Island credit union, seeking to capitalize on growing antibank sentiment, is offering new customers guaranteed “fee free” checking accounts — for life.

Bethpage Federal Credit Union says that effective immediately, new customers opening a Bethpage Bonus checking account can be assured of a lifetime of no debit card fees, no monthly maintenance fees, no transaction fees, no minimum balance fees and no fees charged by Bethpage for use of other banks’ A.T.M.’s. Plus, there are no fees for online, mobile or telephone banking.

Really? Absolutely no fees? For life? Guaranteed? “There are no caveats,” Kirk Kordeleski, the credit union’s president and chief executive, said in a telephone interview.

Well, almost none. The fine print on the credit union’s Web site notes in part, “Fees associated with insufficient funds will apply as necessary.” So, yes, there can be at least one fee — if you sign up for overdraft protection and overdraw your account by more than $20 when making a debit card purchase. (That fee, though, is $10 — roughly a third of the typical overdraft fee charged by big banks.)

Making the offer isn’t that big of a leap for Bethpage, Mr. Kordeleski said, because it already wasn’t charging most of those fees anyway.

The move is a savvy marketing ploy by the credit union, which has already seen an influx of new accounts. Since Bank of America announced its monthly debit card fee, the credit union has opened 1,500 new checking accounts — double the typical amount for a three-week period. A special Web site urges consumers to give their banks a “pink slip,” and offers a $25 incentive for turning in checks or debit cards from their old banks.

The checking account offers a 1 percent annual percentage interest rate, as long as customers use direct deposit, use online banking and make at least 15 debit-card purchases a month. Bethpage also offers better-than-average rates on its certificates of deposit. It is currently offering 0.90 percent on a one-year certificate of deposit, and 0.70 percent on a six-month C.D. says the national averages for those C.D.’s are 0.36 percent and 0.23 percent, respectively.

Membership in the credit union, according to its Web site, is open to anyone who “lives, works, worships, attends school, regularly conducts business in Nassau or Suffolk County, or is an immediate family member of a current member.”

Are credit unions like Bethpage looking more attractive to you?

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Bucks Blog: Citibank Adds Money-Tracking Tools to Online Banking

Updated at 2:40 p.m. to add Citibank comment on avoiding monthly checking account fees.

Citibank on Monday introduced an updated online banking site with new financial management tools, in the mode of money-tracking Web sites like and

The bank is gradually rolling out the new site to customers in randomly selected groups, so not all customers will see the new version immediately. (The bank declined to say how many online banking customers it has.)

The new features come as the bank is making other checking account changes that may be unpopular with customers.

Citi has said it would not institute a monthly fee specifically for debit card use (unlike the move by Bank of America to charge a $5 monthly fee, which drew customer outrage last week). But, as reported by American Banker and others, Citi is increasing monthly service fees and raising the minimum balance necessary to avoid them on certain checking accounts. A Citi spokesman said users of the bank’s Basic Checking account can avoid a monthly fee if they make one direct deposit and one online bill payment monthly (or, if they maintain a $1,500 combined monthly average balance in their checking and linked savings account).

Citi’s public Web site was included in the online makeover too. The public site and the online banking site now feature colorful graphics, less text to digest and an avoidance of “banker speak,” said Tracey Weber, head of Citi’s online and mobile banking operations in North America, during a brief demonstration of the new site last week.

The new site won’t necessarily make you ditch your own bank and join up at Citi. After all, you can already get budgeting tools at sites like and elsewhere.

But, if you’re already a Citi customer, the new tools add some functionality. For instance, Citi customers are now able to see a dashboard with summary information about their accounts, including credit cards, in one place. You can even choose to pull in information on accounts you hold at other institutions, without leaving the Citi site. (As with other budgeting tools that aggregate your accounts in one place, users must enter account information and log-on information so the financial details can be imported.)

Citi’s new suite of financial tools (offered with no fee) automatically categorizes expenditures into different headings — rent, entertainment, etc. — so customers can track where they are spending their money. Users can change the categories as needed to better reflect their habits. Users can also set a budget goal and track how their actual spending compares with that number. The tool displays a color-coded pie chart, showing spending in different areas.

The new tools aim to have the site “become a place for people to plan their financial lives,” not just pay bills, said Ms. Weber. The site can also provide feedback on the customer’s account — for example, how to avoid service fees or how to upgrade to different accounts.

The update is Citi’s latest move in its effort to upgrade its electronic banking options. This summer, the bank began offering a banking app for the iPad that uses some of the same financial tools.

If you’re a Citi customer, let us know what you think of the new banking site. How does it compare with the old one and to other financial management sites you use?

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