3 Reasons You Won't Have to Kiss Free Checking Goodbyehttp://www.fool.com/investing/general/2013/08/01/3-reasons-you-wont-have-to-kiss-free-checking-good.aspx Matt Koppenheffer
August 1, 2013
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The line from PNC Financial's (NYSE: PNC) Bill Demchak during the bank's second-quarter earnings call was unambiguous: "We are phasing out traditional free checking."
The "why" behind such a move isn't complicated. Yesterday, my fellow Fool John Maxfield shared the following:
That's painful if you're a bank losing money on those checking accounts. There are a few things they can do to turn that frown upside down, though, and clearly one of them is no longer offering money-losing accounts for free.
But reports on the death of free checking are premature. Consider if you fit into any of the following three categories:
The fact that you're reading this article right now makes me pretty confident that one of the above -- if not multiple -- are true for you. To be sure, "truly" free checking is still available. Huntington Bancshares (NASDAQ: HBAN), for instance, has an "Asterisk-Free Checking" that's free of monthly fees and "most importantly, free from asterisks." But customers can also bump up to Huntington's "Plus Checking" by maintaining a balance of $15,000 across Huntington products (checking, savings, money market, and so on).
Turning back to PNC and some of the other big boys, though, that $1,500 average monthly balance will still score you a PNC "Performance" account with no monthly fee. Similarly, you can avoid monthly fees on Bank of America's (NYSE: BAC) "MyAccess Checking" and Wells Fargo's (NYSE: WFC) "Value Checking" with that average monthly balance. A monthly direct deposit of $500 will also nix the Wells Fargo fee, while it only takes a $250 monthly direct deposit at B of A to knock off the fee there. And B of A also offers more advanced monthly fee-free checking for customers who have certain outstanding loans.
The point, from a consumer's perspective at least, is that there are a variety of relatively painless ways to avoid checking-account fees even if you don't want to switch to a local bank or credit union -- which, of course, is also an option.
What investors want
For the biggest banks, we could probably add another bullet point: There's enough smoldering animosity that any attempt to charge additional fees is met with outcry.
One of the key ways banks can tilt this equation in their favor is to work on the cost side of it. Rather than introduce additional fees, banks can push customers toward less-costly avenues for their banking services -- like mobile banking, for instance. As Jessica Alling