A couple of weeks ago I talked about how big banks are now restructuring their banking products in the aftermath of recent regulatory changes. Among many new methods to generate revenues lost due to the new laws, such as the CARD and overdraft protection law, a growing number of banks have stopped or will stop to offer free checking accounts to customers. Instead, they are replacing the old, free, no fee checking account with new accounts that either require direct deposit or a minimum monthly balance to avoid service charges. In my last post, I mentioned that starting next month, US Bank will drop its free checking account and replace it with Easy Checking, which will charge a $6.95 monthly fee if the account owner doesn’t use direct deposit or keep at least $1,500 in the account.
Now the list of banks getting rid of free checking accounts just got a new member. BB&T Bank, headquartered in Columbus, Georgia, will replace its free checking account with a new account, called BB&T Bright Banking, effective June 3rd. But, like US Bank, this isn’t just a name change. Gone with the old name too is the fee-free checking. With the old account, customers can enjoy features of the account such as
- No minimum balances
- Free online banking with bill payment
- Free Check Card
- Overdraft protection options
With the coming changes, however, there are certain conditions to be met if you don’t want to pay a monthly fee, including
- Direct Deposit OR
- $1,500 ($2,000 in KY/IN) average checking balance per statement cycle OR
- $6,000 ($7,500 in KY/IN) combined in deposit and retail outstanding loan balances to include Checking, Savings, Money Rate Savings, Investor’s Deposit Accounts, Retail Loans, Lines of Credit, and Credit Card balances OR
- Any BB&T personal mortgage
If you can’t meet any of these conditions, then, sorry, you will be charged a $10 monthly account maintenance fee, which is significantly higher than what US Bank will charge for the same service. The new rules will apply to old checking accounts. If you recently became a BB&T Bank customer and got your free checking from February to April, you will get a 3-month waiver from June to August if you can’t meet the requirement.
With free checking harder and harder to find these, what are the options if you don’t want to pay the service charge either because you are not able to maintain the balance or set up a direct deposit? Well, as I mentioned before, one option is to switch to an online bank that does offer free checking. Some of them even pay interests for money in the account. Since online banks usually do their business online, thus no branch offices, the overhead is lower than most B&M banks. This allows them to pay higher interest rates than B&M banks do and keep offering free checking at the same time. Two of the banks that I mentioned early are as ING Direct and Ally Bank, both have high-yield savings accounts and interest checking account. Not a bad options if you are into avoiding unnecessary fees and earning a little extra at the same time.