Fact Check: Most Americans Still Have Free Checking Accounts

NEW YORK (LowCards.com) -- When the economic downturn hit five years ago, many analysts predicted free checking accounts would become a thing of the past. After all, regulations such as the CARD Act and Dodd-Frank bill cut some of the revenue streams of financial institutions, and many people thought banks would have to make up for this revenue with additional fees.

But the majority of Americans still enjoy a free checking account.

According to a survey conducted by the American Bankers Association, 55% of bank customers are not being charged a fee for their checking account.

The figures from the annual survey have hovered around that number for the past few years: 59% had a free checking account in 2011, and 53% in the 2010 survey. Also see: We're Getting More Confused by Credit Card Terms and Reward>> On the flip side, the findings show that almost half of Americans are now paying for a checking account. In fact, 14% pay $10 or more each month. Here are some tips to possibly avoid a fee on your checking account: Shop around for a different bank if your current bank continues to charge you a monthly fee on your account. Be aware of your minimum balance. Many banks offer free checking if you keep at least a certain balance in your account. Make sure you are above this threshold. Sign up for email and text alerts to update you when your balance dips below a certain level. Also see: What the CFPB Has Accomplished in its First 2 Years>> Check into making direct deposits. Some banks offer free checking if your paycheck is deposited automatically. Have multiple accounts at your bank. Your bank wants as much of your business as possible and may offer free services for multiple accounts. Use your bank's ATMs when making withdrawals. The survey of 1,000 adults was conducted in July for the ABA by Ipsos Public Affairs, an independent market research firm.

Australia’s Central Bank Must Go It Alone

Australia may be on the other side of the globe, but the US Federal Reserve’s dithering over monetary policy since early May has had an outsize influence on the country’s exchange rate. While US investors enjoyed having their gains in Australian equities enhanced by a relatively strong Australian dollar, now that the resource boom has peaked, it’s imperative that the currency weaken in order to boost the competitiveness of the country’s exports.

The Aussie had been trading above parity with the US dollar for much of 2011 and 2012, and finally fell below this key threshold in early May, as Federal Reserve Chairman Ben Bernanke indicated that the central bank was thinking seriously about how to curtail its extraordinary stimulus, otherwise known as quantitative easing. As the market prepared for a September taper, which, of course, never came to pass, the Aussie fell as low as USD0.89 in late August.

With just a couple press conferences, Bernanke had inadvertently engineered a decline in the Aussie that the Reserve Bank of Australia (RBA) failed to achieve on its own, despite seven rounds of interest rate cuts. The RBA has since cut rates again, in August, bringing its short-term cash rate to 2.5 percent, an all-time low.

Nevertheless, movement in the Aussie as of late continues to be largely correlated with traders’ shifting expectations regarding the Fed’s monetary policy (and to a lesser extent the strength of the Chinese economy). President Barack Obama’s nomination of Janet Yellen to succeed Bernanke as head of the central bank may have even extended the timetable for when the Fed starts to wind down its $85 billion per month bond-purchasing program.

As Bernanke’s key deputy at the Fed, Yellen is known to share his dovish stance toward monetary policy. In appearing before the US Senate’s Banking Committee on Thursday, she said there was no set time for a taper, though it obviously can’t continue indefinitely. She acknowledged that the market’s swift reaction to Bernanke’s comments in the late spring had forced the Fed to defer its taper, but also said the Fed shouldn’t be a prisoner of the market. If confirmed, Yellen can be expected to mirror Bernanke’s approach to policymaking, even if their personal style differs.

That means the Aussie likely has a base of support at current levels, which earlier this month the RBA characterized as “uncomfortably high.” The currency recently traded near USD0.937, down about 11.6 percent from its year-to-date high in January, but up 5.3 percent since August. According to a Bloomberg survey of economists, the Aussie is expected to trade at USD0.89 next year, while bottoming around USD0.87 in 2016-17.

The RBA says there’s a chance the exchange rate could remain near current levels over the next couple years, though a softening resource sector could lead to declining capital inflows, which would help depreciate the currency. But it notes that the currency is largely beholden to the monetary policies of the central banks of the world’s larger economies. That means the RBA will have to continue cutting rates to undermine the currency, since it won’t be getting any outside help from its central bank peers.

Though our gains are no longer being enhanced by the currency effect, a weakening Aussie should help our companies compete in the global markets. And we expect that performance to ultimately flow through to higher share prices for our recommendations, which should more than offset the modest decline in the currency.