I don't understand. There is a near-infinite number of banks and credit unions that don't charge fees or allow over drafting.
I use one of them.
Is their existence being hidden from people? I just googled "bank with highest interest rate" about a decade ago and the top result was a bank that ALSO had no fees or minimums their accounts.
I don't understand. There is a near-infinite number of banks and credit unions that don't charge fees or allow over drafting.
Note that a bank not allowing overdrafts (e.g. by returning checks NSF if the account has insufficient funds for them to clear) does not guarantee that an account will never end up with a negative balance. In particular, you might deposit a check which is later returned (as NSF, or as being fraudulent) and not have enough money in your account to cover the check at the point when it is returned -- hence Patrick's point that checking accounts require the bank to extend credit even if the only thing you ever do is deposit checks.
Parent has already explained, but here are the steps.
1. Deposit check
2. Funds are made available to you
3. You withdraw the funds
4. The check is later marked as fraudulent and the payer bank attempts to claw back the funds, with your account balance at zero
Lots and lots of people are unbanked because none of those banks and credit unions will allow them to open accounts. Largely because they all use the same data brokers to determine credit worthiness.
My understanding is that most credit unions in the US do charge NSF fees. I know I've been charged them on a savings account at a credit union that rejected an ACH transfer.
At the time, I switched to one of those high interest low fee online banks. They still charged overdraft fees, but they were lower. I had actually tired to create an account there initially, but was rejected due to lack of credit. I had to create a credit union account checking account first to establish some credit before the online bank would do business with me. Note that I'd had savings accounts at a national bank and the credit union previously, but that wasn't enough.
I just checked and my local credit union still charges for NSF, but the online bank I use does not.
As far as I can tell, most Americans just look at the handful of huge banks that have local retail stores: BofA, Wells Fargo, etc., and decide that somehow everyone must use one of those, and then because those highly-visible banks all charge ridiculous fees, that that's just how it is and everyone just needs to put up with it.
The existence of lots of smaller banks, credit unions, and not to mention a bunch of huge online-only banks like Ally and Schwab somehow just doesn't register.
Yep. My credit union has some flat fees for wire transfers, but is otherwise basically fee-free. Their web interface is one of the worst things I've ever used, but you don't ever have to use it except to make transfers between accounts. And they have Zelle now, so you don't even need a wire transfer to send and receive money from most of the US.
They recently tried to personalize their debit cards though, which caused them to stop being accepted by some merchants, since they're no longer identified as Visa (even though they still are). I now have to use ACH transfer for certain purchases, where debit used to work just fine...
They apparently did this for tap-to-pay support, which is so not worth it because who still buys things in person? Who would want to sacrifice the ability to make online purchases for that??
Do US credit unions generally roll their own software? Or use one of a few vendors that white-label it?
Most Ontario Canada credit unions (and maybe others) just badge an internal provider's UI for their websites and online banking.
I've had worse experiences with a big bank (and Canadian banks are massive) that once forced me to update their app. Then when I went to something I used to always do, schedule a future bill payment, it just said "coming soon". Ughhhhhhh.
Most credit unions (and most banks) buy their software from one of a couple “bank in a box” vendors. Fiserve is an example.
There is very little incentive for these large vendors to innovate so their software tends to feel 2 or 3 generations behind the bigger banks (or even more so the innovative credit unions).
> Do US credit unions generally roll their own software? Or use one of a few vendors that white-label it?
I'm not sure actually. This one is a total piece of crap in terms of UX. It feels like it could easily be the subject of a TDWTF article.
For example, if you delete any messages from the "secure messaging system", it will pop up a modal dialog after they've been deleted, solely to state that the messages have been successfully deleted. These modal dialogs appear everywhere, for basically every possible reason. It is as if toasts or even notification bubbles have been intentionally avoided, in favor of these constant incessant dialogs. You can't even dismiss any of them with Esc.
Even the loading spinners are modal dialogs whenever you switch pages. And either nothing is cached, or the only way to refresh the cache is to reload the entire dashboard.
There is a fake loading screen every time you load the dashboard, just to show you ads. There's no corresponding backend request that it's waiting for the completion of, it's just a timed wait.
And they constantly run email advertising campaigns about scams and phishing that I can't unsubscribe from. (Thank Firefox Relay for letting me block these)
> Most Ontario Canada credit unions (and maybe others) just badge an internal provider's UI for their websites and online banking.
I haven't used more than a couple banks. AmEx Serve didn't have even a remotely similar UI, but I'm not sure if that's even a credit union. I might switch back to them once I have a job, since their fees are not bad, they were just nonzero which I couldn't afford back then.
> I've had worse experiences with a big bank (and Canadian banks are massive) that once forced me to update their app. Then when I went to something I used to always do, schedule a future bill payment, it just said "coming soon". Ughhhhhhh.
I usually just prefer automatic billing, but I haven't yet had to deal with rent or utilities, so that opinion may someday change. Just curious, is that an option for you, or perhaps is there a reason why you don't use it?
I use one of them.
Is their existence being hidden from people? I just googled "bank with highest interest rate" about a decade ago and the top result was a bank that ALSO had no fees or minimums their accounts.