Dive Brief:

• The average bank overdraft fee fell to a 19-year low of $26.61 — an 11% decrease from last year’s $29.80, according to Bankrate’s checking account and ATM fee study released last week.
• ATM fees, however, climbed to a record high, with the average cost for an out-of-network ATM withdrawal reaching $4.73 — beating the previous ceiling of $4.72 from 2019. The total combines the average surcharge of $3.15 levied by the ATM owner and the average fee of $1.58 charged by one’s bank for using an out-of-network ATM.
• The average monthly fee on an interest-bearing checking account is $15.33 — down 5% from $16.19 in 2022 but still higher than the current average monthly fee for noninterest accounts, the study found. The average minimum balance for a service fee waiver on an interest-bearing checking account is $8,684, a decrease from $9,658 in 2022, while that for a non-interest-bearing account is $469 — down from last year’s $539.

Dive Insight:

The average nonsufficient funds fee plunged 25% over the past year to a record low of $19.94 because more banks are moving away from overdraft and NSF fees.

Much of that pivot came in 2022, with Bank of America reducing its per-instance overdraft charge from $35 to $10, and Wells Fargo eliminating NSF fees and transfer fees for certain customers. Truist, PNC and BMO made fee-reduction moves of their own.

Total revenue earned by banks from overdraft and NSF fees in the fourth quarter of 2022 was nearly $1.6 billion — a reduction of roughly half from $3.1 billion in the fourth quarter of 2019, Bankrate found, citing figures from the Consumer Financial Protection Bureau.

In its 26th year, the Bankrate study surveyed 10 banks and thrifts in each of 25 large U.S. markets. Around 62% of surveyed banks reported charging their customers for using out-of-network ATMs.  The average surcharge levied by ATM owners stands now at $3.15 — an $.01 increase from last year’s record of $3.14 and marking the 22nd record high in the past 25 years.

Atlanta stood out among the 25 metropolitan areas surveyed with the highest average ATM fees, where customers pay $5.33 for an out-of-network ATM. In contrast, according to Bankrate's survey, the lowest combined average fees were in Boston at $4.24 and Philadelphia at $4.31.

Around 45% of non-interest-bearing checking accounts are free — down from 46% last year. An additional 42% of non-interest-bearing accounts can become free with eligible direct deposit.

The average annual percentage yield is nearly at an all-time low for interest-bearing checking accounts surveyed, though the Federal Reserve raised the rates 11 times since March last year, the study noted, and some banks — Marcus by Goldman Sachs and BMO among them — have launched, or increased the APY on, their savings-account offerings

Meanwhile, the average monthly service fee for non-interest-bearing accounts fell 2% from $5.44 in 2022 to $5.31 in 2023. The average minimum balance requirement for a fee waiver is the lowest since 2010 at $469, down 13% from last year.