Credit unions are more than twice as likely as banks to offer new members a free checking account, according to a new Bankrate.com report.
The company surveyed the 50 largest credit unions and found that 76% of their checking accounts carry no transaction or service fees regardless of the member's balance or activity. By comparison, only 37% of banks offer that same service to customers, according to Bankrate.
That represents a sharp drop from 2010, when 65% of banks offered free checking to customers, according to Bankrate. At that time, 78% of the credit unions had free checking.
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"At a time when free checking has become increasingly rare at large banks, it is still very prevalent among credit unions," Greg McBride, Bankrate's chief financial analyst, said.
However, according to the survey, only 38% of credit union checking accounts paid interest, with the most common yield being 0.05%.
None of the credit unions required more than $100 to open an account and about two thirds required no minimum balance.
Bankrate reported that the average credit union overdraft fee is $27, less than the banks' fee of $33.
When it comes to ATM fees, 34% have no fee for going out of network – or allow at least one free out-of-network withdrawal each week.
Non-members get hit when using a credit union's ATM, Bankrate said, with 96% charging for that service. The most common fee is $3 – the same as at banks.
The credit union data comes from a survey conducted between Jan. 13 and 20; the bank results come from a Bankrate survey of bank checking accounts that was released in October.
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