Free checking is when you as the consumer pay a small fee and in return the bank gives you certain ways to save. These savings include no low balance fees, no charge for ACH and Direct Deposit transactions, unlimited check writing, and free ATM/or Debit cards. Looking back now, people are realizing that the fees for free checking outweighed the actual savings. If people had invested in a savings account as opposed to a free checking account they would have yielded much more interest/ savings. So if by chance people are still looking to open free checking accounts, this article says that the best place to invest would be in your credit union. The article says that banks are only in the business to make a profit for their owners/ shareholders. Credit unions on the other hand have the main priority of returning low interest loans and high interest deposit accounts.
Could these credit unions be a threat to commercial banks? Credit unions are much smaller then big banks so they offer a more personal banking experience. At the same time however because of their size you are much less likely to find an ATM which could lead to additional costs for having to use other banks ATM. Banks must recognize that they might not be a dominant force in the consumer banking industry anymore. They must adapt to the methods that credit unions are using to gain business and incorporate them.
http://www.bargaineering.com/articles/find-free-checking.html
I think they will present a threat to commerical banks because they are becoming more accesible to the average consumer.
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