More than half of the nation's banks are currently offering low cost "basic" accounts to the public, according to results of a recent survey by the American Bankers Association (BA).
The survey found that 52 percent of all banks and seven in 10 large banks (ssets of $1 billion or more) offer basic bank accounts, reflecting a continuing trend toward greater availability of such accounts. An additional 6 percent of all banks said they plan to start offering these accounts in the near future.Last year's survey found 44 percent of all banks and six in 10 large banks offering basic bank accounts.
Basic bank accounts are designed to meet the needs of low-income consumers, and provide limited banking services at no or low cost. These accounts are also frequently used by senior citizens, students and retirees.
"Basic bank accounts help keep bank services affordable to all members of the community by allowing both the customer and the bank to curtail unnecessary expenses," said Robert W. Moyer, chairman of ABA's Consumer Issues Task Force.
Less than one-fourth of the banks participating in the survey reported that they made a profit on their basic bank accounts, while more than 60 percent reported that the accounts broke even or were subsidized by other accounts at the bank.
ABA's Basic Banking Survey was based on responses from 872 banks selected from a national probability sample based on bank asset size, and was conducted in the fourth quarter of 1987. A summary of results include:
- More than 90 percent of the plans offered free unlimited teller transactions;
-Nine in 10 banks offered free unlimited use of ATMs for deposit and balance inquiries; between 75 and 83 percent (epending on bank size) offered free unlimited ATM withdrawals;
- About 2 percent required direct deposit;
- 66 percent required an initial deposit (edian $50 for large banks, $100 for small banks);
- 30 percent reported a minimum balance requirement (200 median);
- 67 percent required some type of monthly maintenance charge; about 4 in 10 required a charge regardless of the balance in the account (edian $2 to $3 depending on bank size); 31 percent charged only when the balance fell below an established minimum (edian $3 to $4, depending on bank size);
- One in four banks offered their basic banking customers unlimited free checking; 27 percent provided a limited number of free checks (edian 10) and typically charged 30 cents per check above the free limit. About 20 percent charged for every check.
- 27 percent of the banks gave basic/no frills customers reduced-price check printing;
- Typically, between 25 percent (mall banks, assets less than $100 million) and 6.9 percent (arge banks, assets more than $500 million) of all checking accounts were basic accounts; typical account balances for basic accounts were just over $300;
- 94 percent reported providing monthly statements, and 12 percent used check truncation (anceled checks retained by the bank) with their basic banking accounts;
- Nearly half the banks expect their basic banking fees to remain the same over the next 12 months.