PNC to phase out free checking accounts
PNC Bank will eliminate free checking accounts during the next year as it tries to balance investments in technology for retail banking customers and costs.
The Downtown-based bank, the largest in Pennsylvania and seventh largest nationwide, said Monday it began notifying customers that “every account, with the exception of Foundation Checking, will have a minimum balance requirement and other options to keep the account free.”
“This is part of our long-term strategy to remain financially strong and invest more in technology and the services that enable customers to bank when and where they want,” PNC said in a statement.
The changes fit an industry trend that has developed during the past several years, said Richard Barrington, senior financial analyst at MoneyRates.com, a website that tracks bank rates and fees.
The combination of low interest rates, reduced lending volume and government regulations are pushing banks to add or increase fees, Barrington said.
“Banks are sharpening up their pencils and specifically taking a look at which customers are profitable and which ones are not,” he said. “If you aren't active, then they're going to make the account profitable by hiking fees. That's been a common trend.”
Only about a third of the nation's checking accounts are free of monthly maintenance fees, he said, which average $12.26 a month.
Bert Ely, an Alexandria, Va.-based bank consultant, said he expects the trend of higher bank fees to continue for several years because analysts expect interest rates to remain low.
“The problem the banks have is they're not earning much money on the cash balances because interest rates are so low,” Ely said.
PNC will transfer free checking accounts in June 2014 to a new account, Standard Checking, which carries a $7 monthly maintenance fee. The bank will waive that fee if customers meet at least one of three requirements: a $500 average monthly balance, $500 in combined monthly direct deposits or if the customer is 62 years or older.
Other banks in Western Pennsylvania ended free checking, including Citizens Bank, which requires minimum monthly balances on checking accounts to avoid fees.
In response to PNC's announcement, Huntington Bank said it would continue to offer Asterisk-Free checking accounts with no minimum balance, no minimum debit or check usage requirements or monthly maintenance fees.
Dollar Bank offers free checking accounts and has “no intention of making any changes,” said Joseph Smith, senior vice president.
First Commonwealth Bank also has no plans to change its free checking accounts, said Norm Montgomery, executive vice president of business integration.
“It's been a very good product for First Commonwealth,” he said.
Alex Nixon is a Trib Total Media staff writer. Reach him at 412-320-7928 or email@example.com.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Education Management removes itself from Nasdaq listing
- PUC approves Columbia Gas pipeline extensions program for homeowners
- Mortgage rate slide’s impact could be minimal
- Amid struggles, top fiscal executive to leave EDMC
- Highmark seeks double-digit increase for more benefits, heavy use
- Rule to close coal royalty loophole
- World’s 1st carbon capture power plant switches on in Canada
- EQT Corp. boosts profits despite lower gas prices
- Falling fuel prices help airlines — not fliers
- Large-scale batteries are integral in shift to renewable energy
- Stocks jump on strong earnings, led by 3M, Caterpillar