How to Find All the Hidden Fees in Your Checking Account

NEW YORK (MainStreet) — Discovering the vast number of fees that your checking account could be subject to remains an arduous task as most banks still do not make them transparent.

The average checking account can have up to 30 fees, according to a recent report by WalletHub, the Washington, D.C.-based personal finance social network. Checking account fees remain a large driver of banking costs, according to the FDIC.

Read More: The 3 Easiest Banking Fees to Avoid

Comparing checking accounts remains difficult, because there remains a general lack of uniformity across institutions in terms of checking account fee disclosure forms, format and content, said Odysseas Papadimitriou, CEO of WalletHub.com.

The report found that the highest scoring bank was Capital One, which received 90% while the lowest scoring bank was M&T Bank, which received 26.67%. To see the full report, click here.

Read More: 62% of Banks Fail to Disclose Fees

“I can't stress enough the importance of comparison-shopping for any type of financial product and that's difficult to do with a lack of transparency and uniformity in disclosure practices,” Papadimitriou said. “It's not enough these days for consumers to accept what's displayed on a bank's website. Consumers need to do their own digging for more information and to avoid high hidden fees.”

Capital One and Santander Bank were the only two banks to receive a 9, the highest score for the visibility of major fees. The worst banks were TD Bank, PNC, RBS Citizens, Comerica and Key Bank, which scored the lowest on this measure with a 6 since they listed only the monthly fee and the online bill pay fee up front. The average score across the banks was 7.02.

More than half or 52% of the banks scored a perfect 10 on providing accessibility of fee information with well-labeled direct links from the checking account product pages to the fee disclosure. Out of the 25 banks surveyed, USAA and M&T Bank do not provide a fee schedule to consumers on the checking account product pages of their websites.

The banks that provide clear, short, well-organized and easy-to-read single-product disclosures received a perfect 10 on this measure. They include TD Bank, JPMorgan Chase, Wells Fargo, Bank of America, The Huntington National Bank, BB&T Bank, PNC Bank, U.S. Bank, Sun Trust Bank and RBS Citizens Bank.

The worst bank performed the same as the previous year - M&T scored a zero on this measure since it did not provide a schedule of fees to consumers anywhere on its website.

Consumers and need to have the information “at their fingertips in order to make an educated decision about opening accounts with us,” said John Cooke, assistant vice president and online marketing manager for BankFive, a Fall River, Mass.-based savings bank. The bank is also reaching out to customers through videos and podcasts to explain its products.

“At Bank5 Connect, we want to be as transparent as possible with regard to our fees since we are an online-only bank,” he said. “The more information a customer has, the better and easier it is for the customer to understand how their account will function. It sets clear expectations for the ongoing relationship we will have with them.”

Research has shown that consumers want banking to be “simple again,” said John Rosenfeld, head of everyday banking at Citizens Financial Group in Providence, R.I. In 2014, the bank began offering its “One Deposit Checking” product, which does not have a minimum balance and requires customers to make one deposit each statement period of any amount to waive the monthly maintenance fee.

“They want to know how to avoid monthly fees and they want it to be easy,” he said.

The number of checking account fees that banks disclose on their product pages varies greatly from one bank to another, said Papadimitriou. The absence of a fee from the product page does not necessarily mean the fee is $0.

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, he said. Many large banks have adopted a summary disclosure form designed by the Pew Research Center recently to make fee disclosure practices more uniform and straightforward.

“Not all have adopted it, and of the ones who have, there are discrepancies among their disclosures,” said Papadimitriou. “Unfortunately, checking account disclosure practices resemble the Wild West.”

Ally Bank, based in Midvale, Utah, was the first bank to offer product guides that are consistent with the Pew Charitable Trusts' short and concise disclosures for checking accounts, said Diane Morais, Ally Bank deposits and line of business integration executive. The bank was also ranked among the five highest performing banks in Pew’s analysis of 36 of the nation's 50 largest banks according to their practices in the areas of disclosures, overdrafts and dispute resolution.

“We welcome the opportunity to make banking easier and more convenient for consumers by simplifying the fine print and being more transparent when it comes to account services, fees and policies for their accounts,” she said.

Fewer disclosed fees do not mean fewer actual fees, he said. 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 not have to worry if they made enough transactions each month, said Adam Heng, director of retail deposit and payment products of First National Bank of Omaha, which has $16 billion in assets and offers one overdraft forgiveness every 12 months.

“We don’t want you to have to go through hoops and hurdles to maintain a relationship with the bank,” he said. “Millennials want honesty and simplicity, and you can open an account and don’t have to worry about minimal balances and direct deposit, neither of which is required. You don’t have to be thinking about out your checking account every single day to avoid some punitive damage done by a bank.”

- Written by Ellen Chang for MainStreet

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