By Herb Weisbaum ConsumerMan
msnbc.com contributor
updated 10/28/2010 11:47:24 AM ET 2010-10-28T15:47:24

The cost of having a checking account keeps going up, with no end in sight.

A new survey by Bankrate.com shows checking account fees have risen to an all-time high. Fees are rising for opening a checking account or overdrawing it. ATM fees also are skyrocketing. Unless you’re careful, the report concludes, you could pay hundreds of dollars a year in avoidable fees.

Read on and I’ll tell you how to beat the banks.

“It should come as no surprise to consumers, particularly in this regulatory environment, that banks are looking to squeeze more revenue out of fees,” says Greg McBride, Bankrate’s senior financial analyst.

Bouncing checks

The Bankrate results are based on a survey of the five largest banks and five largest thrifts in 25 of the country’s top cities.

The nation’s bankers are doing exactly what they said they would if Congress and the Federal Reserve cracked down on their most abusive and lucrative practices. They would find a way to replace the revenue previously generated by the “gotcha” fees that were eliminated. It’s like a game of Whac-a-Mole: Knock down some fees and others pop up.

Here are the highlights of the Bankrate study.

Free checking accounts are harder to find
The biggest news from this year’s survey: It’s getting harder to find free checking with no strings attached. Only 65 percent of the banks and thrifts surveyed offer these accounts. That’s down from 76 percent last year.

ConsumerMan Tip: At most institutions you can still get free checking if you do certain things. You might have to sign up for direct deposit or online bill pay, use your debit card a certain number of times per month or maintain a minimum balance. If you can’t find what you want at your bank, shop around for another. You can use Bankrate’s checking account database. The vast majority of credit unions and community banks still offer free checking.

Monthly fees go up
When there is a fee, chances are it will be significantly higher. Over the past year, the average fee on non-interest accounts jumped 40 percent from $1.77 to $2.49 a month. For a checking account that pays interest, the average fee is now $13.04 for any month you drop below the required minimum balance. That’s a 4 percent increase from 2009.

Higher balances to avoid monthly fees
The minimum balance required to get a free checking account has risen dramatically since last year. For a free, non-interest checking account, the minimum balance requirement rose nearly 34 percent: up from $187.75 to $249.50. The minimum needed for a free interest-bearing account is $3,883, up $511 or 15% from 2009.

“A non-interest account is a comparative bargain,” McBride says. “That's really what most people should look for if they're looking for an account -- low barriers, low monthly fees, low balance requirements.

ConsumerMan Tip: The average interest-bearing checking account pays a measly 0.1 percent. Keeping a large balance to get such a low rate of return is not an efficient use of your money.

ATM fees hit all-time high
There are two types of ATM fees, and both have gone up in the past year. Use an ATM that is not part of your bank’s ATM network and you can expect to pay a fee to the owner of that cash machine. That’s called the “ATM surcharge” and it now averages $2.33 per transaction, 5 percent higher than in 2009.

But in some cities, the surcharge is higher. Here are the five cities with the highest charge for using an out-of-network ATM:

  • Seattle: $2.69
  • Denver: $2.65
  • Houston:  $2.63
  • Miami: $2.56
  • New York: $2.55

In many cases, your own bank will also charge you if you go outside its ATM network. The Bankrate survey shows this will happen about 75 percent of the time. That fee rose 7 percent, to a nationwide average of $1.41 per transaction.

Make just one transaction a week at an out-of-network ATM and you’ll spend more than $200 a year to get access to your money. That’s a lot of lattes.

ConsumerMan Tip: No matter how high these fees go, they are completely avoidable. Just be sure to use an ATM that’s owned by your bank or that’s part of its network. If you need cash and can’t find an in-network ATM around,  go to a store, make a small purchase with your debit card and ask for cash back. It’s like making a free ATM withdrawal.

Bounced–check fees higher than ever
For the first time, the average charge for overdrawing your checking account broke through the $30 barrier. According to the Bankrate survey, the average bounced-check fee is now $30.47, up 3 percent since 2009.

ConsumerMan Tip: To avoid overdraft fees, you need to know – at all times – how much money is in your account. Online banking lets you do that 24/7. You can also get mobile applications that let you check your account whenever you want. Take advantage of e-mail and text alerts. Both are great ways to find out if your balance drops below a certain level so you don’t overdraw the account.

Here’s the best thing you can do: Sign up for the bank’s overdraft service that links your checking and savings account. That way if you are about to overdraw, the bank will automatically shift money from your savings to your checking account. There’s a small charge for this service but it’s much less than those huge overdraft fees.

The bottom line
New regulations have forced the nation’s banks to change the way they do business. Bankers have responded by charging more for their services and increasing penalty fees, and this trend is likely to continue.

“As consumers we’re not hostage to these higher fees,” notes Bankrate’s Greg McBride. “But we’ve got to be on our toes and be proactive about avoiding them.”

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.74%
$30K home equity loan FICO 5.25%
$75K home equity loan FICO 4.56%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.91%
10.91%
Cash Back Cards 16.36%
16.36%
Rewards Cards 15.96%
15.94%
Source: Bankrate.com