No Economy Of Scale - planning to open a saving account - Brief Article

Kiplinger's Personal Finance Magazine, Dec, 2000 by Joan Goldwasser

BANKING | Small banks and credit unions offer the best deals

Bigger is not necessarily better when it comes to the cost of checking accounts, at least from the customer's point of view. Mike Moebs, chairman of Moebs Services, an economic-research firm in Lake Bluff, Ill., reports that a recent survey of 3,000 banks shows that small community banks and credit unions are the places to go for the best deals.

The EZ checking account at behemoth Citibank costs $7.50 a month unless you keep a total of $1,500 in checking and savings accounts. In contrast, tiny Antigo Co-op Credit Union, in Antigo, Wis. (800-398-2667), offers members free checking with no minimum balance. The Knoxville Teachers Federal Credit Union has a free checking account that pays 6% on balances over $2,500 and charges $5 for a bounced check. The average big-bank fee is $25.

If you're shopping for a new checking account, see if local banks and credit unions can beat the big boys. Also check out Net offerings. First Internet Bank of Indiana (www.firstib.com) offers free checking and, because it doesn't have ATMs all over the country, it will reimburse you up to $6 a month for ATM surcharges imposed by other banks.