Check your checking account... You might be paying more fees than usual. When we stash cash in an account, banks benefit because they can use that idle money to make more cash (by investing or loaning it). That’s why banks often pay interest (usually tiny) on your deposits. Now, Americans are paying record fees for interest checking accounts and getting record-low returns:
- The average monthly account fee is at a high of $15.50.
- The average balance needed to avoid that fee is at a high of $7,550.
- Annual percentage yield is at a low of 0.04%.
Bad news for our wallets... Banks raised fees to squeeze more money out of their consumer businesses, which are suffering. As interest rates hit fresh lows, banks got paid less on consumer loans. Meanwhile, cash-strapped Americans used credit cards less and hoarded money. To sum up Big Banks' latest quarter:
Banks' consumer struggles reflect the economy... The extra $500/week in unemployment benefits expired in July — right around when banks' latest quarters started. The stimulus check boom is over — that money's spent, and negotiations for a 2nd stimulus have been dragging on for months. Until more aid arrives, banks are squeezing consumers because they're getting squeezed, too.