2023 Checking Account And ATM Fee Study

As anyone who’s used a non-partner ATM knows, convenient access to cash often comes at a price. In fact, the average total fees associated with using a non-partner ATM have been steadily rising across the board. According to Bankrate’s 2023 Checking Account & ATM Fees Study, fees to use a non-partner ATM now average an all-time high of $4.73, beating the previous all-time high of $4.72 in 2019.

“ATM fees are tougher than ever as the cost of out-of-network withdrawals has hit an all-time high,” says Greg McBride, CFA, chief financial analyst at Bankrate. “But the fees are easy to avoid as people have less need for cash and ATM networks have expanded, making in-network withdrawals easier than ever before, and they don’t have to debit their bank accounts as often.”

Unlike ATM fees, other bank fees are on the decline. The average overdraft fee fell to $26.61, reflecting an 11% decrease from the amount in Bankrate’s 2022 survey. Though this average is down, overdraft fees are still charged by 91% of accounts surveyed by Bankrate, and they can be as high as $38.

The survey also found that 45% of interest-free checking accounts are free, meaning they don’t charge a monthly fee or require a minimum balance, down slightly from 46% in 2022. The average annual percentage rate (APY) of the interest-free checking accounts surveyed is near the bottom, even though the Federal Reserve has raised interest rates a total of 11 times since March 2022.

For the study, now in its 26th year, Bankrate surveyed a total of 10 banks and thrifts in each of the 25 major U.S. markets. Information was collected on interest-bearing and non-interest-bearing checking accounts, as well as ATM fee policies. Here are some highlights from the study:

Key insights from Bankrate’s checking account and ATM fees survey

ATM fees: Total fees hit record high

Fees rise for customers using ATMs outside of bank networks

Typically, there are one or two fees charged every time you use an out-of-network ATM: First, the bank that owns the ATM may impose a surcharge, and then your bank may charge you a fee. In fact, more than half (62%) of banks surveyed reported that they charge their customers a fee for using out-of-network ATMs.

The average amount banks charged customers for using out-of-network ATMs was $1.58, up 4 percent from $1.52 last year.

Banks charge record fees for non-customers to use ATMs

For the fifth consecutive year, 100% of banks that own ATMs report charging fees for non-customers to use their machines, according to a Bankrate survey. The average fee charged by ATM owners is now $3.15, up slightly from last year’s record of $3.14 and the 22nd highest on record in the past 25 years.

Overall, the average total cost of an out-of-network ATM transaction is currently $4.73, which combines the average fee charged by one’s own bank of $1.58 and the average surcharge of $3.15 imposed by the bank that owns the ATM.

Besides only using in-network ATMs, another way to avoid ATM fees is to request cash back when making debit card purchases at grocery and convenience stores. If you owe money to family or friends, consider paying them using a peer-to-peer payment service like Zelle or PayPal.

Highest average ATM fees by metropolitan area

The U.S. metro area with the highest average total for ATM fees is Atlanta, where using an out-of-network ATM costs about $5.33. (Atlanta still had the highest average fees in 2022, with an average total of $5.38.) Other metro areas with high average totals for ATM fees, according to this year’s data, include Phoenix ($5.24) and Detroit ($5.21).

Meanwhile, the metro areas with the lowest average total ATM fees were Boston ($4.24) and Philadelphia ($4.31), according to Bankrate’s research.

Source: 2023 Bankrate Checking Account and ATM Fees Survey

Overdraft fees: Nearly 20-year low

Overdraft and NSF fees continue to plummet

Overdraft fees are often charged when a bank approves a payment even though you don’t have enough money in your account. A similar fee is a not sufficient funds (NSF) fee, which may be charged if a bank rejects a payment because you don’t have enough funds to cover it.

The average overdraft fee for 2023 is down 11% from last year to $26.61, while the average NSF fee has fallen 25% over the past year to a record low of $19.94. As evidence of the dramatic shift as more banks are eliminating overdraft and NSF fees, the average NSF fee hit a record high of $33.58 in 2021.

Although overdraft fees are declining, most banks still charge them.

The trend among banks in recent years has been to lower or eliminate overdraft fees. According to the Consumer Financial Protection Bureau (CFPB), total overdraft and NSF revenue earned by banks in the fourth quarter of 2022 was about $1.6 billion, down almost 50% from about $3.1 billion in the fourth quarter of 2019.

Although the average amount charged for overdraft and NSF fees has dropped significantly, these fees are still charged on 91% and 70% of accounts, respectively, a Bankrate survey found.

“Account overdraft fees have decreased, but are still charged on the majority of accounts and can be as much as $38,” McBride says. “Avoid overdraft fees altogether by disabling overdraft protection on ATM withdrawals and small debit card purchases, and checking your available account balance before initiating a transaction.”

Non-interest checking accounts: Free accounts still available, average fees dropping

Free checking accounts are still widely available

A Bankrate study found that 45 percent of non-interest checking accounts are free, meaning they don’t charge a monthly fee. Additionally, 42 percent of non-interest accounts are free with qualifying direct deposit. In total, 87 percent of non-interest accounts are free or can be free if you meet the direct deposit requirements.

“Despite the widespread reductions in overdraft fees, free checking accounts have not been sacrificed,” McBride says. “Free checking accounts remain widely available, either on their own or when you sign up for recurring direct deposit.”

Monthly service fees will be slightly reduced

Banks often charge monthly service or maintenance fees and will usually waive these charges for customers who maintain set minimum balances.

The average monthly service fee for non-interest-bearing accounts is $5.31, down 2 percent from $5.44 in 2022. The average minimum balance requirement to waive the service fee is $469, the lowest since 2010 and reflects a 13 percent decrease from $539 last year.

The best way to get your monthly service fee waived

One obvious way to avoid paying maintenance fees is to find a checking account that doesn’t charge maintenance fees, which is relatively easy to find with online banks, which are generally known for charging low or no fees at all.

Another way to avoid fees is to maintain a minimum balance as required by your bank. If you choose this method, make sure it’s an amount you can keep in your account without spending it.

Interest-bearing current accounts: Lower yields, but higher fees and balance requirements

High monthly fees and balance requirements

Interest-bearing checking accounts often have higher fees than non-interest-bearing checking accounts: For example, the average monthly fee for an interest-bearing checking account is $15.33, down 5% from $16.19 in 2022, but still much higher than the current average monthly fee of $5.31 for a non-interest-bearing account.

Additionally, interest-bearing checking accounts usually have stricter requirements for waiving the monthly fee: The average minimum balance required to waive the service fee on an interest-bearing checking account is $8,684, compared with $469 for a non-interest-bearing account.

Yields are near rock bottom

Interest-bearing checking accounts tend to have higher monthly fees and require a significant balance to avoid the fees, but they also often suffer from low yields. After two years at a record low of 0.03%, the average annual interest rate on interest-bearing checking accounts rose to 0.05% in 2023.

Some savings accounts offer interest rates above the rate of inflation, so consider using a free, no-interest checking account to pay bills and a high-yield savings account to park extra funds.

How to avoid expensive bank fees

ATM Fees

Here’s how you can withdraw cash without incurring ATM fees that will reduce your account balance:

• Find a bank that has a large ATM network. If you use ATMs a lot, it can be costly if there aren’t any in-network ATMs nearby. Look for a bank that offers free access to many nearby ATMs. Banks with large ATM networks include:

  • Capital One: 70,000 ATMs across the Capital One, MoneyPass and AllPoint networks

  • Citibank: Over 60,000 ATMs in the Citibank and MoneyPass network

  • Discover Bank: 60,000 ATMs through its Allpoint and MoneyPass networks

  • PNC Bank: 60,000 ATMs in the PNC and Allpoint networks

  • Ally Bank: 43,000 ATMs in its Allpoint network

  • Chase Bank: 16,000 ATMs

  • Bank of America: 15,000 ATMs

• Earn cash back on your debit card purchases: If you use your debit card at participating retailers, request cash back at the register. There’s usually no fee for this, but the withdrawal limits may be much lower than at an ATM.
• Find banks that will refund your ATM fees: Some banks will refund ATM fees charged by other banks if you use their ATMs.

Overdraft fees

Although there is a trend among banks to reduce or eliminate overdraft and NSF fees, the majority of banks still charge these fees. Some banks can charge as much as $38 per overdraft. Here’s how to avoid these fees:

• Opting out of overdraft: You can tell your bank not to cover your overdrafts so you won’t be charged any associated fees. Be aware that if you choose this method, your bank will simply deny any transactions that would overdraft your account.
• Link your checking account to another account. To prevent an overdraft, you can initiate a transfer from another linked account to your checking account, or you can ask your bank to automatically transfer funds to keep an overdraft from occurring. If you consider this option, make sure to find out if your bank charges a fee for such transfers.
• Set a low balance alert: Set your banking app to notify you when your account balance falls below a certain threshold, helping you avoid overspending on your account and incurring the associated fees.

Monthly maintenance fee

Some interest-bearing and non-interest-bearing checking accounts charge monthly fees and require a certain minimum balance to waive the fees. Here are some tips to avoid monthly maintenance fees:

• Find a no monthly fee account: It’s not hard to find free checking accounts with no fees, and you can usually find them at online banks, which are known for charging very few fees.
• Make sure you can easily avoid monthly service fees. If your bank charges a maintenance fee, see if it can easily be waived. Some banks will waive this fee if you maintain a certain balance, receive direct deposit into your account, or meet other conditions.