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Survey: Nearly half of Americans are sacrificing recession preparedness by paying checking fees

Sarah Foster, Bankrate.com on

Published in Home and Consumer News

Finding ways to prepare for a recession or weather high inflation can be even simpler than cutting back on spending and increasing your income. Sometimes, it first comes down to finding the right place to bank.

More than 1 in 4 Americans with a checking account (or 27%) are paying monthly fees, costs that include routine service charges to ATM and overdraft fees, according to a new Bankrate survey. That’s despite many banks on the market not charging for those services.

Those costs can add up. On average, fee-paying checking account holders chalk up $24 a month, or $288 per year, the poll found. And as the chances of a downturn grow and hiring looks likely to slow in the unfolding year, nearly half (or 48%) say those checking account fees are preventing them from preparing for a recession — limiting how much they can save for emergencies and pay down debt.

"Avoiding unnecessary fees is part of the recipe for financial success. Over the coming two decades, assuming the annual rate and level of savings doesn’t change — which it will — one would have another $5,760 to work with," said Mark Hamrick, Bankrate senior economic analyst.

Key takeaways:

—More than 1 in 4 Americans with a checking account (or 27%) are paying fees that cost an average of $24 per month, or $288 per year.

 

—Americans would pay down debt (30%), add to their emergency fund (29%), fund discretionary purchases (27%) or save for a major financial goal (26%) if they didn’t have to pay monthly checking fees.

—Nearly 1 in 3 (or 31%) of checking account holders who pay monthly fees say the reason they’ve remained with their financial institution is unrelated to the products or services it provides.

—Almost two-fifths of Americans with a checking account (37%) say low or no monthly fees are the most important feature in a bank.

Monthly fees are holding Americans back on recession preparations, financial milestones

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©2023 Bankrate.com. Distributed by Tribune Content Agency, LLC.

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