News Column

Fees easier to find at some banks

August 23, 2014

By Brad Harper, Montgomery Advertiser, Ala.



Aug. 23--A new study shows that there's an average of 30 fees associated with the typical checking account, and some of them may surprise you if you're not looking at the fine print.

Financial advisory site WalletHub took a look at the checking account services at the 25 biggest consumer banks in the nation, trying to see how easy it is to find and understand their fees. While the level of transparency varied, one of the biggest problems was the variety of disclosure policies and procedures, which can make it hard for people to compare one bank's checking account with another.

Some offered fee disclosure forms that were hard to decipher or didn't reveal all the fees.

Two of the banks in the study, USAA and M&T Bank, didn't provide a fee schedule at all on their checking account product sites.

Wells Fargo, which has branches across the River Region, tied for No. 2 among the most transparent banks.

"We want a customer for life," Wells Fargo District Manager Ben Norman said. "We don't want them to come in and open an (account) and not know there's a fee somewhere."

Norman said the bank employees try to meet with new customers to talk about their needs and goals before they start an account, both to disclose fees and to make sure they're getting the right account and services.

People who are shopping around for a place to start an account should check out each bank's web site, Norman said.

"It's important to check the bank's website to see what products are offered, to see if you've got ATM or debit card access, to see if you've got online banking or bill pay, and what charges are associated with that account," he said.

"What is the minimum deposit? What is the average balance that a customer needs to keep in that account to avoid service charges? Are the statements printed on paper or can you receive them online? A lot of things come into play."

Capital One was the top-rated bank in the WalletHub fee transparency study, netting perfect scores across three categories. Regions Bank ranked just behind Wells Fargo after being docked for fee disclosures that were slightly less reader-friendly.

Still, the study's authors noted that they weren't able to confidently compare disclosure forms between banks because there's no uniform standard.

"Unfortunately, checking account disclosure practices resemble the Wild West," Evolution Finance Research Analyst Alina Comoreanu said in summarizing the report.

Tips when opening an account

Read the fee schedule thoroughly: The number of checking account fees that banks disclose on their product pages varies greatly from one bank to another. Absence of a fee from the product page does not necessarily mean the fee is $0. Consumers should always review the fee schedule before opening an account to avoid any surprises in the future.

Don't expect consistency in format: Unlike credit card offers that all have to use uniform disclosures of fees like the Schumer Box, there is nothing similar for checking accounts. In recent years, many large banks have adopted a summary disclosure form designed by the Pew Research Center to make fee disclosure practices more uniform and straightforward. However, not all have adopted it. And of the ones who have, there are discrepancies among their disclosures. Unfortunately, checking account disclosure practices resemble the Wild West.

Evaluate your practical needs:As evidenced by the number of fees that checking accounts charge, they offer a plethora of services ranging from straightforward ATM withdrawals to international wire transfers. You must therefore consider what exactly you'll need from your checking account in practical terms. For instance, how much money will you hold in your account at any given time? Do you need a debit card, a physical checkbook, or an accessible local branch? How many ATM withdrawals will you make each month? The answers to such questions will eliminate certain checking account offers from contention and will dictate which fees you should focus on minimizing.

Fewer disclosed fees doesn't mean fewer actual fees: The number of fees listed by banks in disclosures varies from 20 to 40. Some banks disclose their fees only after a customer has opened an account. Others disclose their fees in inconspicuous sections of their websites. Consumers should be aware that there are banks that disclose only a part of their full list of fees initially, another part during the application process and the rest after the consumer has signed up for the account. Also watch out for language like "A full/complete fee schedule will be provided after sign-up."

Cast a wide net: When you begin your search for a new checking account, start broad and refine as you go. That means you should avoid entering the search process with any preconceived notions, such as the particular institution you'll get your account from, how large of a bank you wish to do business with, the necessity of in-person banking, etc.

Supplement with other accounts: A checking account will enable you to receive direct deposit of your monthly checking account, automatically pay monthly bills, and benefit from ad hoc access to cash. You can't use a checking account for everything, though. You might therefore want to strategically supplement your checking account with an attractive savings account and/or credit card offer in order to make your financial management as efficient and rewarding as possible.

WalletHub

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(c)2014 the Montgomery Advertiser (Montgomery, Ala.)

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Source: Montgomery Advertiser (AL)


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