Many banks charge fees these days, but customers have choices and don’t have to pay them if they are willing to shop around.

Banks are businesses that need to make a profit. The traditional model of how this is done is by using depositors money to lend out at higher interest rates than the depositors are paid. However, as consumer banking services increased and became more complex, banks stated the need to charge fees for some of them. They also started having more minimum balance requirements, and charging fees when those were not met by a customer. Many banking services that once required a human to process are now automated. Examples of this are the direct deposit of payroll checks, the use of automatic teller machines instead of a human teller, and account access through the internet. So bank expenses have been reduced through the efficiency of automation. Yet they still try to extract more fees.

Due to the current long and ongoing financial crisis, there have been bank closures more frequently than the pre- crisis period. There are fewer major institutions, and consumers may be feeling that they have limited choices. In the selection of larger, traditional banks this may be true. Even within this context a customer can still shop around for the best offerings. However another avenue for the bank user is a credit union. Credit unions offer the same federally backed insurance for depositors as banks, but typically offer their services with fewer fees and pay out higher interest rates. At this time, they all seem to offer all of the conveniences of a large bank too, with ATMs, in person banking, and online account access.