Banks could eliminate free checking accounts in order to recoup the revenue they will lose under the Federal Reserve’s new rule that caps how much they can charge for interchange fees, according to financial experts.
Robert Hammer, chairman of R.K. Hammer, a bank advisory and research firm, said banks have been public with their intentions to raise fees for everything from checking accounts to penny rolls, USA Today reports.
A recent Bankrate study found that the number of free checking accounts are already down, falling 11 percent from last year.
Greg McBride, a financial analyst, said that two reasons banks are cutting free checking accounts are new regulations on overdraft protection and interchange fees, BankRate reports.
“The revenue balloon is getting squeezed in places, so to get the same amount of revenue, it's got to bulge out someplace else," Bert Ely, a banking consultant and principal of Ely & Co. in Alexandria, Va. said, according to BankRate.
Banks and credit unions may waive checking account fees for customers who maintain a minimum balance, set up direct deposit or use debit cards for a specific number of times each month, USA Today reports.
Service fees are another area banks are targeting to boost revenue.
According to USA Today, Bank of America will start charging a $5 fee for lost debit cards, while U.S. Bank will increase its annual fee for individual retirement accounts by $20.
Banks are also imposing higher ATM fees, paper statement fees and fees for talking to customer-service representatives.