According to a 2010 Bankrate, Inc. checking account fee study, consumers are spending up to $620 annually on avoidable fees setting a new record. The study reveals the average fees associated with using and maintaining an interest bearing checking account, including bounced check fees, ATM surcharges, and monthly services fees. With the narrowing fee gap between Prepaid Debit Cards and traditional checking accounts, consumers often choose the ease of use and minimum hassle of prepaid cards.

Annual data from leading banks and thrifts comparing 2010 to 2009 across the nation include:

• ATM fees rose 5% to $2.33 and average out-of-network fees rose 7% averaging $1.41
• Overdraft fees increased 3% to a new record of $30.47
• Non-interest bearing accounts increased 40% from $1.77 to $2.49
• Interest bearing accounts not maintaining a minimum balance increased 4% to $13.04
• The number of banks not requiring minimum balances or monthly fees fell to 65% from 76%
• Minimum balance requirements are up 34% on non-interest accounts designed to avoid fees
• Minimum balances for non-interest accounts moved from $185.75 to $249.50
• Interest-bearing checking account minimum balances rose 15% from $3,372 to $3883

Greg McBride, CFA and Bankrate senior financial analyst spoke to this issue:

“By exercising a little bit of caution, consumers can save themselves a lot of money and grief. A consumer who goes to an out-of-network ATM weekly can save $260 per year by using their bank’s ATM instead. Additionally, if that same person avoids one monthly overdraft of a checking account, at $30 each overdraft, they can save another $360. This means a potential savings of $620 annually, all without switching accounts or banks.”

For tips on how to avoid these fees and other advice from Bankrate, click here.

Bankrate also ranked the top five cities across the U.S. in the categories of highest ATM and bounced check fees as well as the lowest ATM and bounced check fees. Leading the pack with the highest ATM fees is Seattle at $2.69 followed next by Denver, Houston, Miami and finally New York Metro with the lowest of the top five at $2.55. In the lowest ATM fee category, Cleveland leads the pack at only $1.83 followed by Minneapolis, Kansas City, Milwaukee and ending with Pittsburgh at $2.10 average fee.

The highest bounced check fees in the country are led by Dallas at $33.00 followed by Miami, Houston, Phoenix and then Denver at $31.79. San Francisco tops the list of lowest bounced check fees at $26.88 after which are Los Angeles, Cincinnati with San Diego and Chicago tied for fourth at $28.80.

Bankrate.com surveyed one interest checking account and one non-interest checking account at the five largest banks and the five largest thrifts in 25 large U.S. markets to find the latest trends on checking account and ATM fees. There were 244 interest accounts and 233 non-interest accounts surveyed at 247 banks and thrifts. For more information, visit www.Bankrate.com.