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Credit Union Checking Account Fees Rival Big Banks’

Nov. 21, 2018
Banking

If you think a credit union is the best place for low-cost checking, think again.

Credit unions market themselves as consumer-friendly alternatives to big banks. But these days many credit unions charge higher fees than banks do on checking accounts and collect as much in overdraft charges.

Credit union customers pay an average of $12.90 a month in checking account service charges, according to Moebs Services, an Illinois-based economic research firm. At banks, the average is $8.95 a month.

The median overdraft fee at credit unions is now $30, double what it was in 2000, Moebs Services says. That’s the amount many banks charge.

Five of the 10 largest credit unions do not have daily overdraft fee limits, meaning you can be charged multiple fees before you even know you’ve overdrawn your account, a NerdsInvestigate analysis has found.

NameTotal assets (in billions)Maximum number of daily overdraft charges
Navy Federal Credit Union$91.93
State Employees' Credit Union (SECU)$38.42
Pentagon Federal Credit Union (PenFed)$23.7No limit
Boeing Employees Credit Union (BECU)$18.65
SchoolsFirst Federal Credit Union$15.03
First Tech Federal Credit Union$12.1No limit
Golden 1 Credit Union$12.06
Alliant Credit Union$10.6No limit
America First Credit Union$10.1No limit
Security Service Federal Credit Union$9.5No limit

A credit union may still be a good choice for you, but you won’t know unless you shop around. Here is our list of best checking accounts.

Watch those overdraft fees

Regardless of where you bank, look for ways to limit or avoid overdraft fees, including opting out of overdraft coverage of debit card and ATM transactions.

“Opting out is the single best thing you can do to affect your fees,” says Corey Stone, a former top official at the Consumer Financial Protection Bureau who has studied overdraft data at banks and credit unions.

Stone’s research suggests that people who overdraft regularly can save hundreds of dollars a year by opting out.

One more alternative to consider is community banks, whose overdraft fees have stayed relatively flat over the past five years, says Michael Moebs, an economist and CEO of Moebs Services. He says some community banks charge as little as $6 per overdraft.

NerdWallet writer Spencer Tierney contributed to this report.

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